Replace the dollar bill with a $1 coin, lawmakers propose
The latest idea from members of Congress to save dollars: Get rid of them.
Dollar bills, that is.
A new drive is underway to phase out the paper dollar in favor of a more durable dollar coin.
With millions of worn-out or damaged paper bills pulled from circulation and shredded every year, replacing the dollar note with a coin would save $5.5 billion over 30 years, says Rep. David Schweikert (R-Ariz.), chief sponsor of the legislation.
Coins last an average of 30 years, compared with 18 to 40 months for paper dollars, Schweikert says.
The projected savings is in a report by Congress’ investigative arm, the Government Accountability Office, but the estimate "assumes that the $1 coin would be widely accepted and used by the public.’’
That acceptance may not be a sure thing.
When the idea was raised in 1995, it drew opposition from, among others, the Mount Vernon Ladies’ Assn., which was none too happy with the prospect of removing the image of the estate's former owner from circulation.
Critics of the idea also note that government vaults are full of dollar coins, such as the snubbed Susan B. Anthony dollar.
The Government Accountability Office noted that consumers could be reluctant to carry dollar coins in their pockets, possibly leading to increased demand for $2 bills.
"In Canada, demand for the $2 bill did increase when the $1 note was replaced with the $1 coin,’’ the agency noted. "However, Canada already had a readily circulating $2 note at the time, whereas the United States does not.’’
A group called the Dollar Coin Alliance has formed to push the legislation.
"It is less costly for businesses with cash transactions to process coins than bills, and jammed dollar bills in vending machines cost small business hundreds of millions in annual repair costs and lost sales each year," Schweikert said in a letter to colleagues seeking their support.
Among the legislation's sponsors is Rep. Jeb Hensarling (R-Texas), co-chairman of the congressional "super committee" on deficit reduction.
Schweikert’s Currency Optimization, Innovation and National Savings, or COINS, Act would stop the issuance of $1 bills either four years after the legislation’s enactment or when circulation of $1 coins exceeds 600 million annually, whichever comes first.
Given the political gridlock in Washington, lawmakers are likely to, uh, pass the buck to the next Congress.
-- Richard Simon in Washington
Photo: Stacks of dollar bills are readied for shipment after being cut from sheets at the Bureau of Printing and Engraving in Washington. Credit: Associated Press