National Coinage ProposalsLimited Public Demand for New Dollar Coin or Elimination of Pennies Gao ID: GGD-90-88 May 23, 1990
Pursuant to a congressional request, GAO reviewed proposed changes to the U.S. currency and coinage system, focusing on the: (1) feasibility and effects of replacing the paper dollar with a dollar coin; and (2) possibility of eliminating the half dollar.
GAO found that: (1) the government could save $318 million annually if it replaced the dollar bill with dollar coins, if dollar coins were widely accepted and used; (2) the savings would accrue primarily by reducing production and processing costs and the need to borrow from the public to finance the debt; (3) surveys and past conversion experiences indicated that widespread use would be unlikely unless the government eliminated the dollar bill in the face of a negative public reaction; (4) there is no comparable economic argument for eliminating the penny or the half dollar because both are profitable; (5) while retail businesses and the public recognized the inconvenience of pennies, the problems inherent in rounding off retail transactions to the nearest 5 cents were troubling; and (6) the European countries that have eliminated their lowest denomination coins all did so because production costs exceeded the coins' face value.Recommendations
Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.Director: Team: Phone: