GAO discussed the continued production of the U.S. penny. GAO noted that: (1) Congress needs to address several issues in deciding the future of the penny; (2) the government spent $8.5 million to $9.2 million in fiscal year (FY) 1994 distributing and handling pennies; (3) public attitudes towards the penny are mixed, but the majority of the public supports retaining the penny; (4) in FY 1995, almost 66 percent of pennies did not circulate compared to almost 12 percent of quarters; (5) it could not determine the full budgetary impact of eliminating the penny, but the U.S. Mint would be negatively impacted if billions of pennies were returned; (6) eliminating the penny would result in the loss of jobs for the two contractors who produce zinc penny blanks and for other related businesses; (7) states' ability to collect sales taxes would not be affected by the elimination of the penny, but charitable donations might be affected; (8) penny production and disposal cause no significant environmental problems; (9) proposed legislation would provide a framework for rounding to the nearest nickel and would exempt noncash transactions from the rounding requirement; and (10) military facilities in Europe eliminated the penny in 1980 and received few complaints.
Matter for Congressional Consideration
|Congress may want to consider continuing with the penny, eliminating the penny and rounding all cash transactions, or authorizing rounding of cash transactions as an option to the consumer.||On July 17, 2001, Representative Jim Kolbe introduced a bill (H.R. 2528) requiring rounding of cash transactions to the nearest five cents, and would authorize the Secretary of the Treasury to only produce pennies for numismatics collecting. H.R. 2528 was referred to the House Subcommittee on Domestic Monetary Policy, Technology and Economic Growth on July 31, 2001 with no further action.|