More Change, Less Money: Congress Wants To Do Away With The $1 Bill

We pay for our money. Now, the Government Accountability Office is trying to figure out to save money, by making money differently.

For starters, Congress is looking into doing away with the $1 bill. While American consumers have “shown about as much appetite for $1 coin as kids to their spinach,” think of all the hassle it would save to have more change, and fewer bills. No one would ask you for change to use the phone. No more quarters jammed into vending machines. And when desperation calls for fishing in the fountain for loose change, you could be fishing for dollars. Hypothetically.

More importantly, losing the $1 bill would reportedly save taxpayers over $4.4 billion over the next 30 years.

While vending machine operators have long applauded the use of $1 coins because they don’t tend to jam machines, most people don’t seem to want to carry them. Plus, at $1.75 for a bottle of vending machine water, there’s still three little quarters to cause repair costs and lost sales.

In the past five years, the U.S. Mint has produced 2.4 billion Presidential $1 coins. Most are stored by the Federal Reserve, and production was suspended about a year ago.

Along with getting rid of the $1 bill, the Government Accountability Office is looking into making money out of cheaper materials. The Mint is currently preparing a report for Congress showing how changes in the metal content of coins could save money.

Our money’s metal hasn’t changed since nearly 50 years ago when Congress directed the mint to remove silver from dimes and quarters, and to reduce the quantity of half-dollar coins. Congress is now looking into new changes resulting from the rising cost of copper and nickel.

Still, the bottom like, as stated at a House subcommittee hearing on Thursday, was to “Gradually [take] dollar bills out the economy and replacing them with coins.”

Of course, you have to spend money to make money.

The GAO’s Lorelei St. James told the House Financial Services panel it would take several years for the benefits of switching from paper bills to dollar coins to catch up with the cost of making the change. Equipment would have to be bought or overhauled and more coins would have to be produced upfront to replace bills as they are taken out of circulation.

However, once the coins were in place, they would be more economical, since a coin can stay in circulation for 30 years while paper bills have to be replaced every four or five years.

“We continue to believe that replacing the note with a coin is likely to provide a financial benefit to the government,” said St. James. She added that such a change would work only if the note was completely eliminated and the public educated about the benefits of the switch.

Canadians have been happy with their switch from bill to coin.

Beverly Lepine, chief operating officer of the Royal Canadian Mint, said her country loves its “Loonie,” the nickname for the $1 coin that includes an image of a loon on the back. The switch went over so well that the country also went to a $2 coin called the “Toonie.”

Would you like to see the dollar bill removed and a coin take its place?