Washington, DC (September 20, 2011) House Financial Services Committee member Congressman David Schweikert (R-AZ) today introduced a bill to modernize the nation’s currency by eliminating the wasteful, inefficient $1 note. The Currency Optimization, Innovation and National Savings (COINS) Act calls for a transition to the more economical and environmentally friendly dollar coin, a change that the U.S. Government Accountability Office (GAO) has been advocating for more than two decades to help reduce government waste. Congressman Schweikert is joined in his effort by original co-sponsors, Super Committee member Rep. Jeb Hensarling and Rep. Blaine Luetkemeyer.
According to a report released in March by the GAO, hundreds of millions of taxpayer dollars are wasted each year by the continued use of the dollar note. The report, “Replacing the $1 Note with a $1 Coin Would Provide a Financial Benefit to the Government,” found that the transition would save the government an average of $184 million per year and approximately $5.5 billion over a 30 year period. Using more traditional assumptions in their analysis, savings could be as high as $11.1 billion. This was the fifth report the GAO has issued on the benefits of transitioning to the dollar coin, dating back to 1990. Estimates of annual cost savings in previous reports have been as high as $522 million.
“During a time when bipartisan debt reduction measures are in short supply, this is a piece of legislation we hope everyone in the Congress can get behind,” said former Congressman Jim Kolbe, honorary chairman of the Dollar Coin Alliance. “Americans are demanding that we find common sense solutions to begin bringing down our long-term debt – here’s a simple way to do just that without raising a single tax or cutting a single program.”
The COINS Act would require Federal Reserve Banks to stop issuing the $1 note four years after enactment of the legislation or when circulation of $1 coins exceeds 600 million annually – whichever comes first. This measure is necessary based on the experience of every country that has successfully transitioned to a low denomination coin. As the GAO reported, eliminating the dollar note was “essential to the success of [the] transition” to dollar coins in other countries. A January 2011 poll conducted by the Tarrance Group and Hart Research found that Americans favor the transition to a dollar coin by a two-to-one margin once the potential government savings are explained.
“Many Americans want to know how they personally can help contribute to deficit reduction – this is one simple thing we can all do to chip in,” added former Congressman Kolbe. “It just makes no sense to continue producing a low denomination paper bill when we have an alternative that would save the nation billions of dollars, especially in the current economic climate.”
While dollar bills last only a few years, according to the GAO’s latest estimate, a $1 coin can remain in circulation for more than 30 years. This means a single dollar coin can replace up to 17 dollar notes during its lifetime. Additionally, while billions of dollar notes are shredded and sent to landfills each year, $1 coins are 100 percent recyclable – meaning that even after coins are pulled from circulation, they can be melted down and forged into new coins. The private sector also stands to benefit from a dollar coin transition. Jammed dollar bills in vending machines cost the industry hundreds of millions in annual repair costs and lost sales. Evidence from the transit industry indicates that it is six times less expensive for businesses with high levels of cash transactions to process $1 coins versus $1 bills.
The Dollar Coin Alliance is a coalition of American small businesses, budget watchdogs, trade associations and private companies with a singular focus of moving the United States toward an economical, environmentally friendly dollar coin. Members include Citizens Against Government Waste, the International Association of Machinists, Southeastern Pennsylvania Transportation Authority, Tri-State Automatic Merchandising Council and United Steelworkers.
For more information, or to get involved, please visit www.DollarCoinAlliance.org.
What our members are saying about the dollar coin:
Tom Buffenbarger, President of the International Association of Machinists
“With all the talk in Washington of draconian budget cuts and austerity measures, switching to the dollar coin makes sense. It reduces the deficit without cutting any programs that hurt working people or raising the tax burden on the middle class.”
Tom Schatz, President of Citizens Against Government Waste
“We are literally throwing our money away… the reality is dollar bills last about three years while coins last thirty or more. This small ‘change’ will save the United States billions.”
Alfred Outlaw, Director of Revenue Operations, Southeastern Pennsylvania Transit Authority
“It is six times more expensive for us to process dollar bills vs. dollar coins. Not to mention they are far less likely to jam our fare machines — saving SEPTA commuters’ time and hassle.”
Tony Buckholz, President of the Tri-State Automatic Merchandising Council
“Every time a bill jams up one of our vending machines that is one more dollar down the drain. The dollar coin is good for the taxpayer and good for small business owners like myself. We all win.”
William Dewald, Former Senior Vice President, Federal Reserve Board of St. Louis
“Today’s dollar has the purchasing power of a 1950s dime. The United States prides itself in having a dynamic, market-oriented economy. Yet we are completely backward in not having kept our coinage in line with the purchasing power of the dollar.”