WASHINGTON--(BUSINESS WIRE)--Citizens Against Government Waste CAGW concurred with today's Government Accountability Office’s (GAO) report on the substantial benefits of discontinuing $1 notes in favor of $1 coins. This money-saving idea has been touted by CAGW in its annually-updated Prime Cuts database for years. According to the GAO, phasing out the $1 note and increasing circulation of the $1 coin would save taxpayers an average of $184 million annually and a total of $5.5 billion over the next 30 years. The GAO has published four previous reports on the benefits of the $1 coin, in 1990, 1993, 1995 and 2000, twice recommending the elimination of the $1 note to ensure the success of the coin.
Most of the cost savings associated with coins comes from their comparative durability. The Bureau of Engraving and Printing produces approximately 3.4 billion $1 bills each year, each of which costs 4.2 cents to manufacture and lasts 40 months. By comparison, the $1 coin costs between 12 and 20 cents but has a lifespan of 30 years or more. The $1 coin also saves money because it is cheaper to handle and process. Mass transit agencies have found that processing $1 coins costs 83 percent less than processing $1 bills. Other benefits include savings on the processing of money by banks and businesses. Coins cost 30 cents per thousand pieces to process at Federal Reserve Banks, compared to 75 cents per thousand for $1 notes. Large-scale private-sector users reap even more savings. Coins are also much more difficult to counterfeit.
The GAO report points out that “Over the last 47 years, Australia, Canada, France, Japan, the Netherlands, New Zealand, Norway, Russia, Spain, and the UK, among others, have replaced lower-denomination notes with coins… Canadian officials later determined that the Canadian government saved $450 million (Canadian) between 1987 and 1991."
The Federal Reserve and the U.S. Mint are already required by law to remove barriers to the $1 coin’s circulation. However, the Federal Reserve issues the United States’ paper currency and doesn’t like the competition from the $1 coin, which is issued by the Mint. The Fed’s leaders have instituted regulations and red tape that restrict access to $1 coins for banks, businesses, and individual Americans. These interferences have resulted in the continued circulation of $1 notes, nullifying nearly all of the cost reductions $1 coins would otherwise cause. Conversely, countries in Europe have achieved currency production savings by substituting coins for bills on their lowest-denominated currencies.
“Eliminating the $1 bill in favor of the $1 coin should be an easy decision for elected officials in Washington, who are looking everywhere for ways to reduce the record deficit and debt," said CAGW President Tom Schatz. "The U.S. is supposed to be the economic model for the entire world, yet on this issue we are way behind other nations. Implementing GAO's recommendation will not eliminate a single program or raise taxes by a single penny. Taxpayers should fully embrace this concept. GAO said that the transition requires Congress to 'take the lead' on this issue, and CAGW will continue lead the way to make sure that this long overdue proposal is finally adopted."
Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, mismanagement and abuse in government.