On April 21, 2010, the U.S. Treasury released its new version of the $100 bill. Featuring an updated portrait of Benjamin Franklin, the bill boasts advanced measures to reduce the effectiveness of counterfeiters. However, while the federal government has recently focused on this large tender, more attention needs to be paid to the other end of the currency spectrum: the $1 dollar coin.
In 1997, Congress authorized the Sacagawea dollar coin to replace the Susan B. Anthony dollar, as its supplies were diminishing. Approximately one billion Sacagawea dollars are presently in circulation and 250 million more remain in reserve. On December 22, 2005, former President George W. Bush signed the Presidential $1 Coin Act, creating coins to honor former U.S. Presidents. Four new coins are produced each year, depicting Presidents in subsequential order. The Native American $1 Coin Act, signed into law in September, 2007 brought back the Sacagawea coin. All that remains is large-scale introduction of these coins into circulation.
The advantages of switching to a $1 coin are obvious and substantial. According to an April 7, 2000 Government Accountability Office (GAO) report, replacing the $1 bill with a coin would save taxpayers $522.2 million per year. Most of the cost savings associated with coins comes from their comparative durability. The Bureau of Engraving and Printing produces approximately 3.4 billion $1 bills each year. Each bill costs 4.2 cents to manufacture, and has a lifespan of approximately 21 months. By comparison, the $1 coin costs slightly more to produce – 12-20 cents – but has a lifespan of around 30 years.
Other benefits include savings on processing. Coins cost 30 cents per thousand pieces to process compared to 75 cents per thousand for $1 notes. Coins are also much more difficult to counterfeit.
Much of the justification for the slow progress in introducing coins seemingly results from the public’s disdain for carrying around loose change. However, a December, 2002 GAO article reported that public opinion changes when respondents learn of the cost-savings associated with a switch to coins. GAO reported: “When told that it would save about half a billion dollars a year if the U.S. government replaced the dollar bill with the dollar coin, the number who said they were opposed dropped from 64 percent to 37 percent and those who said they were in favor of such a proposal increased from 17 percent to 55 percent.”
Elimination of the $1 bill could be accomplished by executive branch action, or by an act of Congress. When judging the benefits of such a decision, it seems the obvious course to take.