(NewsNation) — President Donald Trump says he has directed the U.S. Treasury to stop making new pennies, which are worth less than they cost to produce.
“For far too long the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful!” Trump wrote in a Truth Social post on Sunday. “I have instructed my Secretary of the US Treasury to stop producing new pennies.”
He added: “Let’s rip the waste out of our great nations budget, even if it’s a penny at a time.”
Trump directs Treasury to stop making pennies
The U.S. Mint reported losing over $85 million on the nearly 3.2 billion pennies it produced in fiscal year 2024.
Trump’s announcement comes shortly after Elon Musk’s Department of Government Efficiency (DOGE) team highlighted the cost of making pennies.
Here’s how much pennies are costing taxpayers and what eliminating the one-cent coin would take.
How much do pennies and nickels cost?
The main argument for getting rid of pennies is about saving the U.S. some money.
Every penny cost $0.0369 in 2024, up 20% from the year before, according to U.S. Mint’s annual report.
That means the unit cost of producing and distributing a penny is more than triple its face value.
Nickels also cost more to produce than they’re worth. Each of the $0.05 coins cost almost $0.14 to make.
As recently as 2022, the nickel cost about $0.10, but rising raw materials costs have made them more expensive to produce.
The Mint lost $17.7 million on nickels in 2024, meaning the two coins together cost taxpayers over $100 million last year.
In fiscal year 2023, the losses were even higher, nearly $180 million between pennies and nickels.
Pennies were made of copper before 1962 but are now mostly made of zinc with a thin copper plating.
Can Trump discontinue the penny?
It’s not entirely clear if Trump can retire the penny on his own.
“Congress authorizes every coin and most medals that the U.S. Mint manufactures and oversees the Mint’s operations under its Public Enterprise Fund (PEF),” according to the U.S. Mint’s website.
Still, the president may be able to stop the production of new pennies.
“The process of discontinuing the penny in the U.S. is a little unclear. It would likely require an act of Congress, but the Secretary of the Treasury might be able to simply stop the minting of new pennies,” Robert K. Triest, an economics professor at Northeastern University, said last month.
Back in 1857, it was Congress that discontinued the unpopular half-cent coin and made the cent smaller to cut back on the amount of copper needed.
Treasury Secretary Scott Bessent has yet to comment publicly on the president’s directive.
DOGE actions ‘long overdue, much welcomed’: House speaker
Why does the U.S. still make pennies?
Countries like Brazil, Canada, Norway and New Zealand have all stopped producing low-denomination coins, so why is the U.S. still making pennies?
“The Mint’s official reason for minting pennies is that the Federal Reserve orders them,” The New York Times Magazine’s Caity Weaver wrote in a 2024 story calling for the end of the penny.
Weaver added: “Specifically, the Federal Reserve ‘buys’ coins from the Mint at face value and stores them in bags all over the United States for distribution to banks.”
If that doesn’t sound like a very good reason, you’re not alone. Surveys suggest most Americans on both sides of the aisle think the government should stop producing pennies.
In 2013, then-President Barack Obama called the penny a “good metaphor” for some of the larger problems facing the U.S. government but acknowledged that nostalgia may explain the penny’s lasting power.
“It’s one of those things where I think people get attached emotionally to the way things have been,” Obama said. “We remember our piggy banks and counting up all our pennies and then taking them in and getting a dollar bill or a couple of dollars from them, and maybe that’s the reason people haven’t gotten around to it.”
Is there a downside to getting rid of pennies?
Proponents of the penny warn that ending production could drive up demand for nickels, which are even more expensive to produce.
“If penny production were eliminated, nickel production would likely double, compounding the Mint’s losses,” according to Americans for Common Cents, an advocacy group.
Instead, the group argues the Mint should reexamine its overhead costs and focus on reducing the cost of producing nickels.
Decommissioning the penny could also change the way commodities are priced since prices ending in 99 cents are so common. That could be good or bad for consumers.
“The item that once cost $2.99 might then cost $2.95,” said William Dickens, who taught economic and public policy at Northeastern University.
On the other hand: “Businesses might round up more often than down, leading to a slight inflationary effect,” David Smith, an economics professor at Pepperdine University’s Graziadio Business School, told CNBC.
When Canada eliminated the penny, cash transactions were rounded to the nearest five cents based on the total amount of the transaction, not on each item.
A 2017 paper found that penny-rounding in Canada imposed a tax of approximately $3.27 million on Canadian consumers at grocery stores. For a typical store, the additional rounding revenue amounted to an estimated $157 extra each year — suggesting a fairly minimal impact on shoppers.
Others in favor of keeping the penny point out that a so-called “rounding tax” would disproportionately affect the poor since they’re more likely to use cash than the rich.
Would pennies become worthless?
If you’ve been hoarding pennies, don’t worry — they’re unlikely to become worthless overnight. Halting the production of new pennies and removing them from the system are not the same thing.
Ajay Patel, a finance professor at Wake Forest University School of Business, told CNBC the actual elimination of pennies is decades into the future.
According to Patel, people would be able to continue using pennies until they are slowly reabsorbed into the banking system and eventually melted down to recycle their zinc and copper.
In fact, pennies could become more valuable over time.
“Pennies would become more scarce over time and eventually increase in value. In the near term, they might become useless, depending on how the Treasury treats them. I would think that would have to be in phases so people could convert them to other denominations, thus removing them from the system,” Gates Little, the CEO of Alabama-based Southern Bank, told CNBC.
As of right now, there are an estimated 240 billion pennies lying around the U.S., according to The New York Times Magazine. That’s over 700 pennies for every man, woman and child in the country.
The Associated Press contributed to this report.
