January 29, 2012 in Nation/World

Coinage costs trigger bill dictating steel

Richard Simon Los Angeles Times
 

WASHINGTON – A penny-pinching member of Congress is taking aim at the cost of producing 1-cent coins.

Rep. Steve Stivers, R-Ohio, has introduced the Cents and Sensibility Act to require pennies to be made primarily from American steel.

Steel pennies would be dipped in copper and look the same.

Stivers has also introduced similar legislation to change the composition of the nickel, the STEEL Act (for Saving Taxpayer Expenditures by Employing Less Imported Nickel Act).

The legislation is needed, Stivers said, because the cost to produce pennies and nickels now exceeds their face value.

“In these times of fiscal strain, Americans could save millions by simply changing the composition of our coins,” Stivers said in a fact sheet in support of the legislation.

A penny, which consists of 97.5 percent zinc and 2.5 percent copper, cost 2.41 cents to produce last year, up from 1.79 cents the previous year, according to the U.S. Mint. A nickel, which is 75 percent copper and 25 percent nickel, cost 11.18 cents to make, up from 9.22 cents.

The measures are similar to legislation that passed the House in 2008 but languished in the Senate, even though proponents said it could save taxpayers $100 million a year.

Then-U.S. Mint Director Edmund Moy expressed concern to lawmakers at the time that requiring steel pennies “eliminates any consideration of other alternatives that may prove more cost effective.”

He said legislation mandating the use of certain materials could make the Mint vulnerable to volatile metal prices and suggested that Congress leave it to determine the composition of coins.

Stivers and co-sponsors of the bill hail from a steel-producing state.

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