If the government gets rid of the penny, then checks, credit cards, and electronic money transfers may not have to be rounded to the nearest nickel.
House Banking's domestic and international monetary policy subcommittee held a hearing last week on the future of the one-cent coin. A General Accounting Office report considered at the hearing said 56% of the public favors retaining the penny. However, the coin cost Uncle Sam $8 to $9 million in 1994, according to the GAO report. Part of that cost included distributing the penny to commercial banks.
J. William Gadsby, GAO's government business operations director, said Australia eliminated its one-cent and two-cent coins, but maintained the denominations for check, credit card, and electronic transfer transactions. He said this is a "model to be considered."
The subcommittee's chairman, Rep. Michael N. Castle, R-Del., said no legislation is in the pipeline, but the time will come when practical and economic considerations result in the elimination of a coin "that does not circulate and whose costs outweigh the benefits."
Of the 228 billion pennies the U.S. Mint has produced in the past 30 years, only 132 billion are in circulation, according to Federal Reserve estimates. - Stephen Coplan, Medill News Service