Congress needs to support the COINS Act

Congress and the new administration worked desperately to avoid a government shutdown during the first few months of this year. But the battle will likely return in the Fall, and then again in following years with each new budget. All this time eyes will be on Capitol Hill, as Congressional leaders search for budget cuts and common ground. 

Let us offer a simple suggestion: what better place to start saving taxpayers’ money than by reforming our inefficient currency?

While currency reform may sound like a herculean task, it can be done easily and is long overdue. Rep. Claudia Tenney (R-N.Y.) and Bob Brady (D-Pa.) introduced legislation in the House – The Currency Optimization, Innovation, and National Savings (COINS) Act of 2017 – that encourages common-sense reforms that will save American taxpayers up to $16 billion without one budget cut or raised tax. Tenney and Brady are teaming up with Sens. John McCain (R-Ariz.) and Mike Enzi (R-Wyo.), the chairman of the Senate Budget Committee, who together introduced the Senate version of the COINS Act.

The COINS Act (S.759) tackles three types of currency reform: suspending the penny, reducing the cost of the nickel and replacing the dollar bill with the dollar coin. These three actions alone would offer Congress – and the taxpayers they serve – more than $16 billion in savings. How do we know the savings will be that much? Two of Washington, D.C.’s leading authorities on the budget and fiscal policy – Aaron Klein, former Chief Economist for the Senate Banking Committee and Deputy Assistant Secretary of the U.S. Treasury, and G. William Hoagland, former Staff Director for Republicans on the Senate Budget Committee – recently released new research, “Currency Modernization: More to be Done,” underlining those savings.

The penny and nickel both currently cost more to produce than they are worth. Every time one of these coins is put into circulation, the taxpayer loses money– already over $1 billion in the past decade. Pausing production of the penny alone would save taxpayers at least another $1 billion over the next decade.

But it’s not just the penny and nickel that have to be addressed; we’re also throwing away money by making the dollar note. The change in our dollar currency is long overdue, because the dollar note has outlived its usefulness in our economy. The U.S. is one of only three industrialized nations to still have a single denomination paper note. Most major economies in the world transitioned to a dollar coin years and even decades ago. Coins have a life span of 30 years or more, while the paper dollar has to be replaced every 2-3 years.  Countries that have made the switch experienced significant savings for their governments in the process – in some cases, ten times the original estimate.

Congress’ own budget watchdog – the nonpartisan Government Accountability Office (GAO) – recognizes the many benefits of a dollar coin and has recommended switching to the dollar coin ten times over the last 24 years.

If the savings are so easily attainable, the question is why hasn’t Congress already taken advantage of these available savings?  In part, it is because there is a misperception that the American people do not want a change in their currency.  But this is contrary to years of public opinion polling. In fact, a poll conducted earlier this year shows voters agree 2:1 on modernizing one-dollar currency when they learn of the budget savings it will achieve.

And as an added bonus, it is a bipartisan agreement. Republicans (74 percent), Democrats (68 percent), and Independents (65 percent) see common ground when it comes to replacing the dollar bill with the dollar coin when informed of the savings from making the switch.

With the budget under pressure due to rising demands and limited resources, finding taxpayer savings should be one of Congress’ top priorities. Congress has known the cost savings of modernizing to a dollar coin for years and ignored the facts. It would be irresponsible to throw billions in taxpayer savings down the drain while dollar bills are still ending up in landfills after being in circulation for only a year or two. Congress needs to support the COINS Act and make these sensible changes to our currency.

Kolbe served in Congress from 1985-2007. Penny served from 1983-1995. 

The views expressed by this author are their own and are not the views of The Hill.