Limited Public Demand for New Dollar Coin or Elimination of Penny

GAO discussed the feasibility, expected acceptance, and potential effects of proposed legislation that would significantly change U.S. currency and coins. GAO noted that: (1) over a 30-year period, annual budgetary savings from issuing a dollar coin would be $318 million; (2) by issuing the coin, the government could reduce its currency production and processing costs by $41.4 million annually, primarily due to the coin's longer life and more convenient processing; (3) by issuing the coin, the government could further save by reducing the need to borrow to finance the debt; (4) although the production cost would be about 6 cents per coin, the coin would last about 30 years compared to a note's average life of 1.4 years; (5) both the penny and the half dollar were profitable to the government, since their value exceeded their production and distribution costs, and their elimination could have negative effects, primarily on the poor, due to rounding cash to the nearest nickel; and (6) to ensure widespread public acceptance of a dollar coin, the federal government would have to cooperate in eliminating the dollar note, and would have to remain firm in its decision despite the possibility of public opposition.