Since taking office, President Trump has targeted various issues, from large ones like Greenland to smaller ones like paper straws and pennies. He announced that he had instructed Treasury Secretary Scott Bessent to stop producing new pennies, a move he claimed would help reduce unnecessary government spending. In a post on Truth Social, Trump stated, “Let’s rip the waste out of our great nation’s budget, even if it’s a penny at a time,” and pointed out that pennies “literally cost us more than 2 cents.”
It is unclear whether Trump has the authority to make this decision, as it is Congress, not the Treasury or Federal Reserve, that authorizes coin production, according to the U.S. Mint. However, Trump’s statement is accurate in that pennies cost more to produce than they are worth.
Experts and government officials have long suggested eliminating the penny due to rising production costs and declining purchasing power caused by inflation.
In the past year, it cost 3.69 cents to produce and distribute a penny, leading to a loss of 2.69 cents per coin. The Mint issued over three billion pennies last year, at a loss of approximately $85.3 million. Pennies, often given as change but rarely spent, made up more than half of all coins produced by the Mint. As of last year, there were about 250 billion pennies in circulation, or roughly 700 per person in the U.S.
Many countries have already eliminated their smallest-denomination coins in recent decades. In 2012, Canada stopped producing pennies, citing the costs and waste associated with them. Australia followed suit in 1992 by withdrawing its one- and two-cent coins due to inflation and production costs. Other countries, such as Sweden and New Zealand, also discontinued their one-cent coins.
In Australia, removing these coins had little impact, according to Andrew Stoeckel, an honorary professor at the Australian National University. In the U.S., eliminating pennies would likely have minimal economic impact, though the government could save some money, he added.
Opposition to eliminating pennies has come from groups like Americans for Common Cents, which argues that doing so would not save money because fixed overhead costs at the Mint would remain, potentially raising the cost of other coins. Additionally, the demand for nickels, which are even more expensive to produce at 13.78 cents per coin, would increase.
Penny supporters also argue that eliminating the coin would effectively impose a one-cent sales tax due to the prevalence of prices ending in 99 cents. However, much of the resistance may stem from sentimental value, as Professor Stoeckel suggests. People may keep pennies as mementos, and the coins could end up being hoarded.
