By Angela Rodriguez |Staff Writer|
During a recent online chat sponsored by Google, President Obama announced his support in retiring the penny and suggested the one cent coin is a “good metaphor” for some of the larger problems facing lawmakers as they seek to reduce the deficit.
“I will tell you right now, this will not be a huge savings for government, but anytime we’re spending more money on something that people don’t actually use that’s an example of something we should change,” said Obama in the Google+ Hangout chat.
The penny has long been criticized for being costlier to mint than it’s worth.
According to the U.S. Mint 2011 annual report, the copper one cent coin costs 2.4 cents to produce.
Before 1982, the penny was composed of 95 percent copper and 5 percent zinc, but were later changed to 97.5 percent zinc and 2.5 percent copper to reduce minting costs.
In 2001, it cost .79 cents to produce the one cent coin and then jumped up to 2.41 cents in 2012.
This year however, production cost dropped to 1.99 cents, a small decline in price.
Because of this, Obama asked Congress for permission to change an expensive 30-year-old recipe for pennies and nickels.
Since 2010, the Treasury has been researching metals and has yet to develop a more economic mixture for future penny production.
“If the metal for the penny were free, we would still exceed one cent,” said Richard A. Peterson, acting director of the U.S Mint.
Materials used to mint each penny like zinc and copper have become more expensive due to manufacturing shifts in China raising their prices.
Last year, the total cost of minting pennies was $58 million, less than one-tenth of a percent of 2012’s total federal spending.
Other countries have began or have already stopped penny production which resulted in substantial savings.
In February, Canada began a six year phase out of its pennies.
In 1964 Australia stopped minting their pennies, and in 1990, New Zealand demonetized the penny.
Currently, Great Britain still uses pennies as well as the European Union, however Finland does not.
The one cent coin has been looked down upon for a while since Americans are using the penny less and less.
Obama stated that it would be up to Congress to pass a bill to get rid of the penny.
Historically, there has never been a coin in circulation worth as little as the penny until now.
According to CNN Money, President Obama said that discontinuation of the penny would not lead to a tremendous savings, but it would be a savings on something that people don’t really use.
“It’s one of those things where I think people get attached emotionally to the way things have been,” said Obama. “We remember our piggy banks and counting out all the pennies and then taking them and getting a dollar bill or a couple of dollars.”
The U.S Mint produced about 4.3 billion pennies last year which gradually fall out of circulation ending up in places like jars, ashtrays and on the asphalt of parking lots.
The bill regarding the production of pennies is being considered by Congress.