(Washington, D.C.) – The nation’s premier taxpayer watchdog group today encouraged the U.S. Treasury to aggressively increase the circulation of $1 coins.  The coins have not enjoyed widespread circulation because of a turf war within the U.S. Treasury.  Thirteen years ago, Congress passed the U.S. $1 Coin Act of 1997, giving the U.S. Treasury the authority to get $1 coins into circulation.  The advantages of using a $1 coin are substantial.  According to an April 7, 2000 Government Accountability Office (GAO) report, replacing the $1 bill with a coin would save taxpayers $522.2 million per year.  The savings would likely be even higher today.

Most of the cost savings associated with coins comes from their comparative durability.  The Bureau of Engraving and Printing produces approximately 3.4 billion $1 bills each year, each of which costs 4.2 cents to manufacture.  Each bill has a lifespan of approximately 21 months.  By comparison, the $1 coin costs slightly more to produce – 12 to 20 cents – but has a lifespan of 30 years or more.  The $1 coin saves money because it is cheaper to handle and process.  Mass transit agencies have found that processing $1 coins costs 83 percent less than processing $1 bills.  In addition, vending machine operators have determined that $1 coins save their industry $1 billion a year.  Other benefits include savings on the processing of money by banks and businesses.  Coins cost 30 cents per thousand pieces to process at Federal Reserve Banks, compared to 75 cents per thousand for $1 notes.  Large-scale private-sector users reap even more savings.  Processing bills costs them more than 500 percent above processing coins.  Coins are also much more difficult to counterfeit.

The Federal Reserve and the U.S. Mint are required by law to remove barriers to the $1 coin’s circulation.  However, the Federal Reserve issues the United States’ paper currency and doesn’t like the competition from the $1 coin, which is issued by the Mint.  The Fed’s leaders have instituted regulations and red tape that restrict access to $1 coins for banks, businesses, and individual Americans.

“The nation is facing a $1.4 trillion deficit and struggling to find ways to save money,” said CAGW President Tom Schatz.  “The $1 coin saves the federal government considerable sums of money because $1 coins are more durable and cost significantly less to produce over their lifespan than $1 bills.  Taxpayers deserve to realize the savings associated with these coins.  It is time for Treasury Secretary Geithner to remove bureaucratic barriers and aggressively promote the circulation of $1 coins,” concluded Schatz.

Citizens Against Government Waste , a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government, issued this statement.

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