The Elon Musk-led Department of Government Efficiency does not appear to be a fan of the penny. In a Tuesday night X post, the DOGE account wrote, "The penny costs over 3 cents to make and cost US taxpayers over $179 million in FY2023. The Mint produced over 4.5 billion pennies in FY2023, around 40% of the 11.4 billion coins for circulation produced. Penny (or 3 cents!) for your thoughts." CBS News reports that cost has already more than doubled since 2016, when it cost 1.5 cents to mint each penny; the rising cost of zinc, which makes up the bulk of the coin, is to blame. Per the US Mint's 2024 report, the current cost to manufacture and distribute a penny stands at 3.7 cents.
It's far from the first time the penny has been in the crosshairs. Treasury Secretary Jacob Lew suggested getting rid of it in 2015. CBS News flags one potential downside to doing so, as the Federal Reserve Bank of Richmond pointed out in a 2020 blog post: "For a single item or small-value purchase, rounding up or down [to the nearest five cents] could represent a significant price change." Should DOGE succeed in cutting the $179 million spent on the penny, it'll still have a long way to go in terms of cutting $500 billion in annual federal spending; the penny savings would cover just 0.04% of that amount.
Sen. Joni Ernst pitched a variation on the idea to Musk in November. In a letter outlining various cost-cutting ideas for DOGE, she advocated for changing the makeup of two coins, writing, "The government is losing money making money, paying more than three cents to produce a penny and more than 11 cents for a nickel. That makes no cents when simply changing the composition of the coins could save more than $50 million a year." (More penny stories.)
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