In a move that has sparked both debate and confusion, President Donald Trump announced Sunday that he has ordered Treasury Secretary Scott Bessent to stop minting new pennies. Citing the high cost of production and the inefficiency of keeping the one-cent coin in circulation, Trump declared on Truth Social, “Let’s rip the waste out of our great nation’s budget, even if it’s a penny at a time.”
Can Trump Actually Stop Penny Production?
The legality of this executive order is unclear. According to the U.S. Mint, the production of coins falls under congressional authority, not the Treasury Department or the Federal Reserve. While the President can influence policy and make budgetary recommendations, ultimately, Congress would need to pass legislation to eliminate the penny officially.
Despite the uncertainty surrounding his authority on this matter, Trump’s argument is based on well-documented economic concerns. According to the U.S. Mint’s most recent annual report, it costs 3.69 cents to produce a single penny, far exceeding its face value. The Mint produced over three billion pennies last year alone, resulting in an estimated $85.3 million loss.
Why the Penny Is Considered a Burden
For decades, economists and financial experts have questioned the viability of keeping the penny in circulation. The purchasing power of the one-cent coin has significantly declined due to inflation, making it nearly obsolete in daily transactions. Many people receive pennies as change but rarely use them, leading to stockpiles of coins in jars, drawers, and forgotten corners.
“The penny has long outlived its usefulness,” said Michael Hendricks, an economist at Georgetown University. “It costs more to produce than it’s worth, and the time spent handling pennies in cash transactions adds up to millions of wasted hours annually.”
Countries such as Canada, Australia, New Zealand, and Sweden have already eliminated their lowest-denomination coins. Canada, for example, phased out the penny in 2012, opting instead to round cash transactions to the nearest five cents. The Canadian government estimated that eliminating pennies saved tens of millions of dollars per year in production and handling costs.
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Opposition to Eliminating the Penny
Despite the strong economic case for retiring the penny, the movement to eliminate it has faced resistance. Advocacy groups like Americans for Common Cents argue that removing the coin would disrupt pricing and impose an unspoken “one-cent tax” on consumers, as businesses may round prices up rather than down.
Another concern is the impact on nickel production. The nickel, which currently costs 13.78 cents to produce, would likely be used more frequently, increasing the Mint’s overall production costs. Critics argue that rather than eliminating the penny, the government should focus on finding cheaper materials to mint both pennies and nickels.
Additionally, the penny holds sentimental value for many Americans. Some see it as a historic artifact, while others associate it with cultural traditions like the phrase “a penny for your thoughts” or the superstition that finding a penny brings good luck.
What Happens Next?
Given the legal hurdles surrounding Trump’s announcement, it is unclear whether his directive will have any immediate effect. Congress would need to formally pass legislation to discontinue the penny, something that has been debated but never enacted. However, Trump’s statement has reignited a national conversation about whether the U.S. should follow other nations in phasing out small-denomination coins.
The Treasury Department has yet to comment on how it plans to proceed. Meanwhile, economic analysts suggest that any significant policy change regarding U.S. currency will require a broader legislative effort rather than a unilateral executive order.
For now, the penny remains in circulation, but its future is more uncertain than ever.
