Congressman Luis Gutierrez, Chairman of the Subcommittee on Domestic and International Monetary Policy, Trade and Technology, and Financial Services Committee Chairman Barney Frank have introduced H.R. 3330, the “Coinage Materials Modernization Act of 2007.” The bill will authorize the Secretary of the Treasury to change the composition of coins issued by the U.S. Mint to less expensive materials. The Treasury Department estimates that changing the composition of pennies and nickels will save the government over $100 million a year. By making similar changes to the half dollar, quarter and dime, the government can save as much as $400 million annually.
Currently, pennies are made mostly of zinc and have a copper-plated surface and nickels are made up of an alloy of 75 percent copper and 25 percent nickel. Since March of 2003, world demand for core metals has driven up the price of copper and nickel by 300% and of zinc by 450%. At the current specifications for these coins, it costs the government 1.7 cents to make a penny and 10 cents to make a nickel. This legislation will allow Treasury to change the composition to less expensive alternatives and dramatically reduce the costs of producing these coins.
After this bill is enacted, the United States Mint, which is a part of Treasury, will seek public and industry comment on possible alternative composition for the coins. After this comment period, there will be a competitive public bidding process for new coinage materials. Gutierrez added today that Congress, and particularly the Subcommittee on Domestic and International Monetary Policy, Trade and Technology, will exercise strong oversight over this process.