Saying it will save money, the Obama administration is scrapping the production of presidential dollar coins even as an Arizona congressman wants them to replace greenbacks.
Vice President Joe Biden announced Tuesday it was ending the "wasteful production" of the coins. He said while there was some interest in the series, more than 40 percent of the coins have been returned to the Federal Reserve banks because people have shown little interest.
Biden said the result is there are 1.4 billion of the coins sitting in vaults. He said scrapping production except for a relative handful for collectors will save taxpayers at least $50 million a year in production and storage costs.
The move comes just months after Arizona Republican Congressman David Schweikert introduced legislation to pretty much do the exact opposite. He wants to halt production of dollar bills.
Schweikert acknowledged low public acceptance of dollar coins. In fact, the presidential series is the third attempt to make dollar coins popular. And he said he's willing to go along with the administration's decision to suspend further production given that 1.4 billion stockpile.
But he believes Americans can be made to love the coin - or at least use it - once the dollar bills are gone.
And Schweikert cites his own figures to buttress his argument that doing things his way would save far more money, at least in the long run.
Neal Wolin, the deputy treasury secretary, said the problem dates to 2005 when Congress mandated that the Mint issue four new presidential dollar coins each year from 2007 to 2016. But he said the demand for each new coin drops significantly after introduction, with the excess winding up in the Federal Reserve.
He said what's already set aside is "enough to meet current levels of circulating demand for more than a decade." More to the point, if current trends hold up, the inventory of dollar coins will grow to 2 billion by the end of the program in 2016.
Schweikert, however, said the administration is looking at the numbers all wrong.
"If done right, transitioning to the dollar coin could save us billions," he said.
He cites a report by the General Accounting Office which puts the cost of minting a coin at about 15 cents, compared to less than 3 cents for a paper bill. But the GAO puts the average life span of a bill in the neighborhood of three years.
By contrast, Schweikert said, a coin remains in circulation for about 30 years. He pegged the annual savings at $184 million.
"At a time when we are $15 trillion in the hole, every common-sense, money-saving measure needs to be given consideration," he said.
That still leaves the issue of public acceptance.
Schweikert said too many people still have memories of earlier attempts to mint dollar coins. He said these newer coins are lighter and copper colored, meaning they won't be mistaken for quarters.
He said once people get their hands on the newer coins they'll be much more accepting. Schweikert said that can be done by convincing merchants who use those automatic coin change machines - the ones that spit out change of less than a dollar on purchases - to use dollar coins.
Wolin, in a prepared statement, said the move by the White House does not require congressional approval. He said federal law directs the treasury secretary to mint coins "in amounts the secretary decides are necessary to meet the needs of the United States."
"Given the substantial, growing inventory of $1 coins, it is clear that the minting of hundreds of millions of additional $1 coins over the next several years is not necessary and not an effective use of taxpayer dollars," Wolin said. By suspending production of new coins, Wolin said any demand will be met by taking those now stored out of the vault.
There will be some new coins, though.
The next set to be minted honors President Chester A. Arthur, set to be released this coming spring. Wolin said there will be a "dramatically lower production run which will be set based on collector demand."