Steel Penny Envisioned
Posted on: Friday, 23 May 2008, 15:00 CDT
By LAURIE KELLMAN, THE ASSOCIATED PRESS
WASHINGTON Further evidence that times are tough: It now costs more than a penny to make a penny. And the cost of a nickel is more than 7 cents.
Surging prices for copper, zinc and nickel have some in Congress trying to bring back the steel-made pennies of World War II, and maybe using steel for nickels, as well.
Copper and nickel prices have tripled since 2003 and the price of zinc has quadrupled, said Rep. Luis Gutierrez, D-Ill., whose subcommittee oversees the U.S. Mint.
Keeping the coin content means "contributing to our national debt by almost as much as the coin is worth," Gutierrez said.
A penny, which consists of 97.5 percent zinc and 2.5 percent copper, cost 1.26 cents to make as of Tuesday. And a nickel 75 percent copper and the rest nickel cost 7.7 cents, based on current commodity prices, according to the Mint.
That's down from the end of the 2007, when even higher metal prices drove the penny's cost to 1.67 cents, according to the Mint. The cost of making a nickel then was nearly a dime.
Gutierrez estimated that striking the two coins at costs well above their face value set the Treasury and taxpayers back about $100 million last year alone.
A lousy deal, lawmakers have concluded. On Tuesday, the House debated a bill that directs the Treasury secretary to "prescribe" suggest a new, more economical composition of the nickel and the penny.
A vote was delayed because of Republican procedural moves and is expected later this week.
Mint Director Edmund Moy told House Financial Services Chairman Barney Frank, D-Mass., that the Treasury Department opposes the bill as "too prescriptive," in part because it does not explicitly delegate the power to decide the new coin composition.
The legislation is an alternative to what many consider a more pragmatic, but politically impossible solution to the penny problem: getting rid of it altogether.
"People still want pennies, which is why we're still making them," Moy said.
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(c) 2008 Record, The; Bergen County, N.J.. Provided by ProQuest Information and Learning. All rights Reserved.
Source: Record, The; Bergen County, N.J.
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