Coin Debate: Could Death of Dollar Save Billions?

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Which would you rather carry: dollar bills or dollar coins? Most people say "bills."

But what if you found out it would save America $4.5 billion, maybe even $40 billion, simply by converting to coins instead of bills?

CBN News takes a look at the latest move to get Americans to make the switch from paper to coins.

The Coin Debate

Seven times now the Government Accountability Office has begged Congress to abandon the bill.

But lawmakers don't like offending voters and the Federal Reserve, a coin opponent, said three-fourths of Americans don't want the change.

Coin fans note, however, that number nearly reverses to 61 percent support when Americans find out how much money the switch-over would save.

"Four-point-four billion savings over 30 years. And if you actually take a look at what happened in Canada, they blew passed their projections of savings," Rep. David Schweikert, R-Ariz., said.

Congress recently discovered Canada has saved more than 10 times what it thought it would when Canadians unexpectedly overwhelmingly supported the one dollar Loonie coin.

Beverly Lepine of the Royal Canadian Mint said having a loon on the coin instead of a French-Canadian explorer is a happy accident.

"Dyes were shipped to Winnipeg and were lost. And it was not a loon that was supposed to be the design on the one dollar coin. It was supposed to be a voyageur. The dyes have never been found. A major snowstorm…no one has ever known," she explained.

"As a result of that, the Canadian government immediately made the decision to bring the loon design up," she continued. "The loon design caught on and was called a Loonie."

Canadians say one other key was replacing the paper bills without delay.

"Once you get that done, people are quite happy. The Loon up there is very popular." former Rep. Jim Kolbe, with the Dollar Coin Alliance, said.

But Jim Miller, former director of the Office of Management and Budget, scoffed at that idea.

"Are you really prepared to force users, voters, to use a means of exchange they clearly reject out of hand?" he said.

Opponents have pointed out that the Mint has failed three times to sell the coin.

More to the Story

Kolbe said there's more to that than meets the eye, like what happened with the Sacagawea dollar coin.

"There was a tremendous demand for it," he said. "And in fact the Mint took to directly sending these to Walmart and there were lines at Walmart stores of people trying to get the Sacagawea coins."

But the Federal Reserve distributes all the nation's money, and the Fed itself makes profits from selling only paper money. Consequently, it began choking off the coins.

"The merchants found it more difficult to get the coins to keep in their drawers because the Federal Reserve Board wasn't making it easy for them to get it," Kolbe explained. "You see the Federal Reserve Board gets the profit from making the paper dollars and the Mint gets the profit from making all coins."

If the coin ever does take off, much of the saving, financially and environmentally, will come from getting rid of a paper bill that wears out in two to four years.

"A coin lasts for 30 years at least before it gets so degraded that you can't use it anymore. Then you can melt it down and reuse it," Kolbe said.

"You can't do that with paper. You have to pulp it, then shred it and then it goes into landfills -- tons and tons and tons of landfill every year are paper bills that are shredded up," he explained.

A final point: the United States would have fewer coins to sort out and save a huge bundle of money by also getting rid of the pennies and nickels that now cost more to make than they're worth.

"A penny costs about 2.4 cents to mint, and a nickel costs 11.1 cents to mint," Rep. Steve Stivers, R-Ohio, said.

"More than 70 percent of the Mint's production goes into making pennies that you just drop in the street or you put into a jar someplace," Kolbe said.

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Paul  Strand

Paul Strand

CBN News Washington Sr. Correspondent

As senior correspondent in CBN's Washington, D.C., bureau, Paul Strand has covered a variety of political and social issues, with an emphasis on defense, justice, and Congress.  Follow Paul on Twitter @PaulStrandCBN and "like" him at Facebook.com/PaulStrandCBN.