Bills are introduced in Congress to curtail dollar coin programs
Tom Wayne
Congress (Over)Reacts to $1 Coin Hoard
July 21, 2011 By Michael Zielinski
On July 19, 2011, separate bills were introduced in the House of
Representatives and the Senate which call for the termination of the
Presidential $1 Coin Program. The legislation follows numerous high
profile media reports about growing hoard of $1 coins in storage and a
report from the Federal Reserve System Board of Governors indicating
costs of $3.65 million to transport and store the hoard.
The bill H.R. 2593: Wasteful Presidential Coin Act of 2011 was
introduced by Rep. Jackie Speier of California and is cosponsored by
Rep. Jared Polis of Colorado.
Specifically, the bill calls for subsection (n) of Section 5112 of
title 31 to be struck. This subsection of the code provides for the
redesign and issuance of the Presidential $1 coins at a rate of four
per year until all deceased (for 2 years or more) former Presidents
have been honored. The amendment to the code would take effect at the
end of a 30-day period on the date following enactment. Currently, the
series has reached the 18th President Ulysses S. Grant and would have
been expected to continue until at least 2016.
The bill also seeks to restrict the overproduction of $1 coins. This
seems to cover the separate Native American $1 Coin Program, which
would remain within the code. Specifically, "No $1 coin may be minted
or issued under this section during any period in which the number of
$1 coins issued, but not in circulation, is more than 10 percent of
the number of $1 coins in circulation."
H.R. 2593 would seem to have at least one additional implication. It
does not specifically address the First Spouse Gold Coin Program,
contained in subsection (o) of Section 5112 of title 31. This program
features each of the spouses of the former Presidents on one-half
ounce 24 karat gold coins. The code instructs the series to continue
"during the same period described in subsection (n)". Without
subsection (n) in the code, the First Spouse series would presumably
also come to an end.
The restriction on overproduction of $1 coins included in the bill
seems particularly ambiguous. In the first place, how many $1 coins
have been issued? The number of Presidential $1 coins struck by the
United States Mint is more than 2.2 billion, and the production for
the Native American $1 Coin Program is around 180 million, but what
about previous $1 coins? There were more than 1.4 billion Sacagawea
Dollars struck and issued by the US Mint. Prior to this, there were
900 million Susan B. Anthony Dollars, and more than 600 million
Eisenhower Dollars. How do you determine the number of these $1 coins
“issued but not in circulation”? Possibly this language was intended
to reference the number of coins being held by the Federal Reserve
Banks, but large portions of the coins held by the public are no doubt
accumulated in jars of loose change and coin collections, and not
actively circulated. The application of this restriction with the
current language seems impossible, if not highly problematic.
The Senate bill S. 1385 introduced by Sen. David Vitter of Louisiana
and cosponsored by Sen. Jim DeMint of South Carolina takes a more
succinct approach. It simply calls for subsection (n) to be struck and
replaced with "(n) [Reserved]".
Similar to the House bill, this would eliminate the Presidential $1
Coin Program, leave the Native American $1 Coin Program intact, and
seem to end the First Spouse Gold Coin Program.
Other Possible Responses
While both of the bills introduced would address the current issue of
storing and maintaining our national $1 coin hoard, they would again
put off the main issue of the non-circulation of $1 coins. From 1971
to 1978, Eisenhower Dollars were produced in large numbers and failed
to meaningfully circulate. It was believed that the coins were too
bulky and large to be readily used by the public. In 1979, the smaller
sized Susan B. Anthony Dollar was introduced to solve the perceived
issues of the previous series. The coins were extremely unpopular with
the public since the smaller size caused them to be confused with
quarters. In 2000, the next bold experiment was the Sacagawea Dollar,
which had both a distinctive edge and color, so as not to be confused
with other denominations. Again, the coins failed to circulate. The
next attempt came in 2007, with the present series that would feature
rotating designs to entice the public’s interest. Once again, it is
clearly not working.
All along, the obvious primary deterrent to $1 coin circulation has
been the coexistence of the $1 banknote. If the Presidential $1 Coin
Program is terminated, several years in the future, I am sure that yet
another well meaning $1 coin series will be introduced and again
rejected by the public.
On numerous occasions, the Government Accountability Office has
indicated that replacing the $1 banknote with the $1 coin would save
money in the long run. The switch has taken place long ago in
countries around the world with positive results and seemingly little
backlash from the public.
A second possible response to the $1 coin hoard would be the minor
tweaks to the existing legislation that were recommended by the United
States Mint and the Federal Reserve System Board of Governors. The
mandatory introductory period during which Reserve Banks must have a
sufficient number of each new Presidential $1 coin design available
would be eliminated, and the production requirement for the Native
American $1 coin would be removed.
Without these requirements, the two $1 coin series could continue in
limited fashion. A likely scenario would be that the coins would not
be produced for general circulation, but struck in quantities
necessary to satisfy the demand from coin collectors. Meanwhile, any
actual circulation demand for $1 coins could be satisfied from the
existing hoard.
The limited continued production of $1 coins would be a money maker.
When the previous Sacagawea Dollars failed to circulate, the US Mint
continued to produce the coins and sell them to collectors in bags and
rolls at a premium to face value. The US Mint currently sells 25-coin
rolls of each Presidential $1 coin and Native American $1 coin to
collectors for $39.95 plus shipping and handling. That makes for a
price of $1.60 per coin for something that costs about 30 cents to
produce. Demand for the rolls would no doubt increase if the coins
were not available through any other channels.
Some Guy
Since the bill is entirely logical and will cut expenditures, I presume it will
be DOA in our crazy Congress but I gave it a try anyway.
Bremick
"Some Guy" <so...@guy.xxx> wrote in message
news:j0jufn$f5$1...@speranza.aioe.org...
>I wrote to my Congressman urging him to support this bill.
> Since the bill is entirely logical and will cut expenditures, I presume it
> will be DOA in our crazy Congress but I gave it a try anyway.
>
Probably more than a few years too late. Recalling the outrage over the
2009 proof Eagle incident, couldn't you just imagine the collector outcry if
the president dollars were stopped midseries? And instead of picking up
rolls of each new Unc president at the local bank at face value, collectors
would now get to pay a premium from the Mint or $37 a roll plus $6.00
shipping from your friendly dealer for the rest of the
made-only-for-collectors rolls.
oly
> "Some Guy" <s...@guy.xxx> wrote in message
Actually, the Treasury is probably happy to "earn" the seignorage.
It's just a couple of million per annum, but it helps pay for the
coffee in the Treasury offices.
I think the making of the blanks helps to keep Alton, IL prosperous
too.
oly
Bremick
"oly" <oly...@aol.com> wrote in message
news:b61ddaad-da4e-41be...@a11g2000yqm.googlegroups.com...
________________
Okay. As long as somebody's happy.
Gene85
wrote:
>H.R. 2593:
H.R. 2593: Borderlands Conservation and Security Act of 2007
110th Congress: 2007-2008
To secure and conserve Federal public lands and natural resources
along the international land borders of the United States, and for
other purposes.
Sponsor: Rep. Raul Grijalva [D-AZ7]
This bill never became law. This bill was proposed in a previous
session of Congress. Sessions of Congress last two years, and at the
end of each session all proposed bills and resolutions that haven't
passed are cleared from the books. Members often reintroduce bills
that did not come up for debate
Ron
The real expense is the dollar bill. The coins last much
longer than the bills. The government should eliminate
the bills and it would SAVE money in the long run.
Americans just don't want to break their habits. The
Canadian government just stopped printing small
bills and now everyone there uses $1 and $2 coins
on a daily basis.
Ron
Bremick
"Ron" <rrpi...@yahoo.com> wrote in message
news:dfb9c022-4475-4643...@l2g2000vbn.googlegroups.com...
> The whole thing about the expense of coins is idiotic.
That was the point. The rising cost of minting billions of dollar coins
that are not being used and then paying to store them.
> The real expense is the dollar bill.
Dollar bills have been produced and used for tens of decades. Dollar coins
have never been as popular even when they could be used to buy dinner.
Makes one wonder how both the $1 bill and coin have co-existed for over two
centuries without a serious public outcry to eliminate the paper.
> The coins last much longer than the bills.
Of course. At current production rates, most may last forever in storage.
The fact that bills wear out so often indicates that they are used
regularly. By the time there is any serious attempt to eliminate the paper
dollar, there may be little need for either version. We'll be paying for
most everything with plastic, cell phones, and personal gadgets. We can
just about do that now. Coins will be needed only to provide change to the
few holdouts who prefer to pay with bills. We certainly will not need the
growing stockpile of dollar coins.
> The government should eliminate the bills and it would SAVE money in the
> long run.
How long will the "long run" be? Stop producing unnecessary dollar coins
and it will save money NOW.
> Americans just don't want to break their habits. The
> Canadian government just stopped printing small
> bills and now everyone there uses $1 and $2 coins
> on a daily basis.
So you're in close touch with the habits of "everyone" in Canada? Are you
sure more haven't switched to other payment methods rather than having to
carry more coins in their pockets? Does everyone leave home with $1 and $2
coins now, or do they just accumulate some in change and dump them in the
pickle jar at home?
There can be two sides to this issue.