America May Finally Stop Losing Money on Pennies

For more than two centuries, the penny has been part of American life.

But eventually tradition has to confront arithmetic.

When the federal government spends substantially more than one cent to manufacture a coin worth one cent, taxpayers are effectively losing money every time another one enters circulation.

That is why the House's latest action on the Common Cents Act deserves attention—not because eliminating the penny will solve America's fiscal problems, but because it represents something Washington rarely makes look simple:

Stop spending taxpayer money producing something for substantially more than it is worth.

The House passed the bipartisan legislation this week. The proposal would permanently prohibit the Treasury from producing circulating pennies while still allowing limited collector editions. Existing pennies would remain legal tender.

Trump had already stopped production

This did not begin in Congress.

President Donald Trump directed the Treasury Department to end production of circulating pennies after manufacturing costs climbed well above the coin's value. The U.S. Mint struck the final circulating penny in November 2025, ending a 232-year production run.

Congress is now considering making that change permanent so a future administration could not simply restart mass production without another legislative change.

The numbers explain why.

The U.S. Mint currently estimates that producing a penny costs about 3.69 cents.

In other words, the government can spend nearly four cents creating something with a monetary value of one cent.

The Mint estimates that suspending circulating penny production can save approximately $56 million per year.

That is not a trillion-dollar spending reduction.

But $56 million is still $56 million belonging to American taxpayers.

And fiscal discipline ultimately consists of identifying thousands of places—large and small—where government is spending money inefficiently.

The penny had become an expensive habit

In fiscal year 2024 alone, the Mint produced approximately 3.2 billion pennies.

Pennies represented roughly 57% of all circulating coins manufactured that year.

Think about what that means operationally.

Metal has to be purchased.

Coins have to be manufactured.

They have to be packaged.

Transported.

Stored.

Distributed through the Federal Reserve and banking system.

Then businesses must count, transport and manage them.

All of that infrastructure exists to support a coin whose purchasing power has diminished dramatically over generations.

The economic question therefore becomes less emotional:

Does America still need to manufacture billions of new pennies when hundreds of billions already exist?

The Mint estimates approximately 300 billion pennies remain in circulation.

Existing pennies aren't disappearing.

Americans can continue spending them.

The proposal simply stops making more for everyday circulation.

What happens at the cash register?

This is where many consumers understandably become concerned.

Prices are not suddenly going to be rounded to five-dollar increments, and businesses would not need to eliminate prices such as $4.99.

Electronic transactions—including credit cards, debit cards, checks and other non-cash payments—would continue to be calculated to the exact cent.

The rounding mechanism applies to the final total of cash transactions when exact change cannot be provided.

For example, totals would generally move to the nearest five-cent amount.

Existing pennies could still be accepted for exact payment.

The legislation also contains special protection for cash wages: according to the House-passed framework reported by Fox News, cash wages that require rounding would be rounded up, rather than reducing what a worker receives.

Will businesses simply use rounding to charge everybody more?

That is an understandable concern.

But countries that have already removed one-cent coins provide useful evidence.

When Canada phased out its penny, it established symmetric rounding: some totals rounded down while others rounded up.

The Bank of Canada concluded that the inflationary effect would likely be insignificant or nonexistent because upward and downward rounding tend to offset one another when applied to the final cash total. It also cited Australia and New Zealand, where eliminating small coins produced no noticeable inflation effect.

That does not guarantee America's transition will be flawless.

It does show that eliminating a low-value coin does not automatically mean merchants receive a hidden license to increase prices.

And because electronic payments remain exact, a $12.97 purchase paid by card would still be $12.97.

The nickel may be the next opportunity for savings

There is another important provision in the legislation that has received less attention.

The nickel has developed the same problem—only worse.

According to the U.S. Mint's fiscal 2025 annual report, producing a five-cent nickel cost approximately 13.31 cents.

That means taxpayers were spending more than thirteen cents to create a coin worth five.

The Common Cents Act would authorize Treasury to examine using a less expensive composition for nickels, provided testing demonstrates that the new material reduces costs without significantly disrupting vending machines and other coin-operated equipment.

That is important because merely eliminating the penny while ignoring an increasingly expensive nickel would solve only part of the problem.

The better principle is broader:

The cost of producing currency should make economic sense relative to the usefulness of that currency.

Small reform, larger principle

Nobody should pretend eliminating penny production balances the federal budget.

It doesn't.

A federal government operating at America's scale will not repair its finances through one $56 million saving.

But dismissing $56 million because federal spending is measured in trillions creates exactly the mentality that allows waste to accumulate.

Imagine a business owner discovering that one routine company process burns $56 million every year for no compelling operational reason.

No serious CEO would respond:

"That's too small compared with our overall revenue. Ignore it."

They would fix it.

Government should face the same discipline.

And in this instance, the decision has unusually broad political support.

The legislation has been led by Republican Rep. Lisa McClain of Michigan alongside Democratic Rep. Robert Garcia of California, and the House advanced the measure with bipartisan backing. Both lawmakers have framed the issue around reducing unnecessary government costs.

What Americans should understand

The penny is not being confiscated.

Lincoln is not disappearing from American history.

Collectors can still buy specially minted versions.

The pennies already sitting in jars, drawers and cash registers remain money.

The change is much simpler:

America would stop manufacturing billions of additional one-cent coins at a financial loss.

President Trump's Treasury already stopped circulating production.

Congress is now moving toward putting that decision into federal law, establishing rules for cash rounding and looking for additional savings in nickel production.

Sometimes economic reform involves complicated tax policy, trade negotiations or trillion-dollar budgets.

And sometimes common sense really is this straightforward:

If it costs nearly four cents to manufacture one cent, stop making it.