Cutting the penny is part of the broader war to cut government spending, and it needs to be viewed in that context
Democrats take aim at DOGE and Elon Musk
Fox News senior congressional correspondent Chad Pergram reports on Democratic pushback on the Department of Government Efficiency and its proposed cuts to government spending.
There’s an old saying that if you watch the pennies and nickels, then the dollars take care of themselves. President Donald Trump is taking that dictum to heart, ordering Treasury Secretary Scott Bessent to halt minting pennies because the government actually loses money on the coins.
Normally, printing currency and minting coins costs less than the face value of the money being created. For example, the federal government pays less than $100 for the paper and ink to print a $100 bill. That used to be true for pennies too, because the amount of copper used to mint a penny cost less than one cent.
But decades of deficit-fueled inflation devalued America’s currency, so much so that it now costs more than a penny to create one. To preserve its seigniorage (the value gained by turning materials like paper or metal into money), the Treasury began minting pennies out of cheaper metals and using a mere wash of copper on the outside.
TRUMP SAYS HE HAS INSTRUCTED US TREASURY TO STOP MINTING NEW PENNIES: 'THIS IS SO WASTEFUL!'
But the continued devaluation of the dollar, which accelerated greatly under President Joe Biden, sent commodity prices soaring so that even zinc is too costly to make a penny. Put simply, the government is losing money with every one of these coins that it mints, and that means it’s costing taxpayers too.
Our government is losing money with every one of these coins that it mints, and that means it’s costing taxpayers, too. (CoinTrackers)
Trump is so determined to restore sanity to federal finances that he is leaving no stone unturned when it comes to looking for ways to cut costs in the government’s bloated budget. Americans like Trump, Bessent, and Elon Musk understand the rationale of the above-mentioned aphorism about paying attention to the little details—and that’s the only way to eventually fix the multi-trillion-dollar annual deficit.
While some may be sentimental about Lincoln’s image on our nation’s smallest coin, Honest Abe would likely make the same decision as Trump.
This is yet another example of Trump and his team having to clean up the mess left by the Biden administration’s failures. Under Biden, the currency lost approximately one-fifth of its value as prices skyrocketed over 20 percent in just four years, while runaway federal spending became the norm, the debt exploded to over $36 trillion, and annual interest on that debt exceeded $1 trillion.
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In short, Biden left both the government’s and American families’ finances in tatters. The only way out of this economic malaise is to stop the spending out of Washington, D.C. And that starts by returning to common sense—like the cessation of minting coins that lose money for the government and taxpayers.
While some may be sentimental about Lincoln’s image on our nation’s smallest coin, Honest Abe would likely make the same decision as Trump. The self-effacing 16th president faced difficult currency questions himself when trying to finance the Civil War and would certainly rather preserve America’s solvency than perpetual his visage on increasingly scarce financial transactions in the digital age.
Additionally, no one should worry about running out of pennies. In fact, there’s no reason why today’s transactions can’t be conducted to the nearest 10th of a dollar instead of the nearest 100th, meaning a single decimal place instead of two.
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In fact, doing so would simply recreate the same level of exactness in prices that existed in 1913, before the Federal Reserve began a near continuous campaign of devaluing the nation’s currency, a cumulative drop of over 90 percent.
Cutting the penny is part of the broader war to cut government spending, and it needs to be viewed in that context. Trump, Bessent, and Musk understand the perilous condition of federal finance led by the Biden administration and the omnipresent nature of abuse, fraud, and waste within the federal budget.
This is why the Department of Government Efficiency (DOGE) is so vital in returning America to fiscal sanity. They’re going through everything with a fine-tooth comb and ensuring taxpayer dollars are being used appropriately.
We are truly in bad shape financially, and no government spending can be exempt from close examination—down to the penny.
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E. J. Antoni is a research fellow for regional economics in The Heritage Foundation’s Center for Data Analysis and a senior fellow at Committee to Unleash Prosperity.
