Make Sense Not Cents Act would save American taxpayers millions of dollars by eliminating the penny

The U.S. Mint's 2024 Annual Report stated the unit cost for pennies rose by 20% in 2024, and for the 19th year in a row, its unit cost remained above its face value

A bipartisan bill has been introduced in the Senate to eliminate the penny by 2025.

The measure, titled the "Make Sense Not Cents Act," was unveiled by Sens. Mike Lee, R-Utah, and Jeff Merkley, D-Ore.

It would phase out the production of the 1-cent coin over two years.

"Minting pennies costs the American taxpayer millions every year — nearly four times more than the pennies are worth," Lee said in the bill's press release. "No private business would produce something at a 4x loss. It's time to stop wasting Americans' hard-earned tax dollars making overpriced pennies."

The U.S. Mint's 2024 Annual Report stated that the unit cost for pennies rose by 20% in 2024, and for the 19th year in a row, its unit cost remained above its face value, at 3.69 cents.

Penny production last year came to a gross cost of $117 million, per the report.

The bill would also require the U.S. Mint to submit a report to Congress on the cost of producing each coin and the relative purchasing power of the smallest coins in increments of 5 cents.

"The penny no longer serves a useful purpose and is a drain on taxpayers," Merkley said. "We can do better than continuing to mindlessly produce coins that lose money and don't serve the public good."

The move comes as the U.S. could join other countries that have dropped their lowest currency.

In the 1990s, Australia and New Zealand stopped 1- and 2-cent penny production. Then in 2006, New Zealand stopped producing its 5-cent coin as well, according to Nasdaq.

Canada followed suit in 2012, removing 6 billion pennies from circulation over three years, GovMint reported. The decision was made due to "rising production costs exceeding the face value of the coin and a decline in the penny's purchasing power over time," the site reported.

When the Bahamas stopped producing its lowest valued coin in 2020, Lisa Cook, a former White House aide during the Obama administration, told the BBC that "I think the public in rich, industrialized countries is becoming less and less wedded to coins, generally."

"After Canada stopped minting the penny in 2012, I think policymakers in other industrialized countries will be more willing to eliminate lower-value coins," she added.

In the same 2024 annual report, the U.S. Mint reported that the unit cost for nickels has also remained above face value for 19 consecutive years, at 13.78 cents.

The total amount spent on nickel production in 2024 was about $27.8 million.

While Lee's bipartisan bill does not mention nixing nickels, The New York Times entertained the idea.

"Having just two coins could hasten a trend away from physical currency that is already underway," the Times wrote.

The Federal Reserve reported that in 2023, the average American made only seven cash payments, and the number has been consistent since 2021. Further, between 2016 and 2023, cash payments decreased from 31% of all transactions to 16%.