Feb. 15, 2012 at 4:00 PM ET
Would you mind a couple of $1 coins clanking around in your pocket if it could save the government some money?
The U.S. General Accountability Office released a study Wednesday that found replacing the dollar bill with a dollar coin could saving the federal government $4.4 billion over 30 years.
“With the current budget situation, we felt Congress needs to be aware of all the viable options for gaining financial benefits, and replacing the dollar note with the dollar coin provides such a benefit over the long term," Lorelei St. James, the GAO’s director of physical infrastructure, said on the agency's website.
In the near term, however, the monetary switcheroo would lead to losses. In fact, the GAO found replacing paper dollars with coins would result in a net loss of $531 million in the first 10 years, or an average of $53 million each year.
It’s not the first time such a proposal has been put on the table as a way to save money. Last March, the GAO released a similar report on the benefits of going to a coin, generating a huge outcry of both support and opposition for such a move.
This time around won’t be much different.
In September, a bill called the Currency Optimization, Innovation and National Savings Act, aka COINS, was introduced in the House, calling for a move to the coin. A similar bill was introduced in the Senate late last month.
“We are certain that this White House and this Congress will take a serious look at the huge savings in the COINS Act,” said Jim Kolbe, a former congressman and the honorary chairman of the Dollar Coin Alliance, in a statement. “We think the introduction of this legislation in the Senate, together with the earlier introduction in the House, is a big step forward toward the passage of this cost-saving, currency modernization legislation.”
On Team Dollar Bill is U.S. Sen. Scott Brown, R-Mass., home state of the company that has been making the dollar note for more than a century, Crane & Co.
Brown was quoted today on the website of The Berkshire Eagle, a Massachusetts newspaper, saying a move to coins is ill advised “because it's the wrong thing for the American taxpayer and would cost Massachusetts hundreds of jobs."
The GAO didn’t look at the cost to the private sector or any environmental issues that could arise. Instead the agency focused on was the cost of the change over the long haul.
The analysis found: “The cost of producing a large number of coins necessary for the transition would result in a net loss in six of the first seven years. In the eighth year, and for the remaining two years, this situation is reversed: the interest savings outweigh the production costs and the net benefits would be positive.”
By then, many of you might not care whether paper or coins win out because cyber cash could make the debate moot.
According to a November report by ABI Research, “mobile wallets are coming,” and the number of people paying with their phones will hit 594 million globally in 2016.
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