Steel Cent and Nickel House Bill Passes
By Mike Unser
The House debated on
the legislation and finally voted yesterday to
change the metallic composition of the penny and
5-cent nickel to a less expensive copper-colored
Although the prices of copper, zinc and nickel
metals in coins have declined in recent months,
the penny and 5-cent nickel still cost more to
make than what they’re worth—resulting in a
reported loss of about $100 million every year,
or $1 billion over a decade.
It now costs about 1.26 cents to make the penny
and about 7.7 cents to make the nickel.
House bill “H.R. 5512, the Coin Modernization
and Taxpayer Savings Act of 2008” would seek to
change those manufacturing costs by using
copper-colored steal, which could cut the cost
of making pennies down to about 0.7 cents each.
But its recent passage in the House is no
guarantee it’ll make its way to the White House
H.R. 5512 must still go through the Senate and
then the President, and not everyone is happy
with the current legislation.
One person who would like to see changes is
United States Mint Director Ed Moy. In hearings
before a House Subcommittee, he commented that
the stipulated time in changing the penny to
steel was too short. While the newest version of
the bill was modified from its initial timeline
of 180 days to 270 days, Moy had requested 18-24
months during testimony.
Moy also indicates there may be better, and less
costly metals for coins than steel. As a
compromise to that, the bill was again modified
from its original version to allow alternative
metals for the penny—if, and only if, the
solution were to "achieve the (bill’s) goals."
However, only 90 days from the date of H.R. 5512
becoming law is allowed in coming up with
another solution. The likelihood of that
happening seems doubtful.
The legislation also includes the prospect of
steel nickels within two years passage. But the
language in that area of H.R. 5512 becomes more
clouded with variables, and would likely result
in several bouts with Congress. Doubt can be
cast on the possibility of it ever happening.
Finally, the updated legislation provides the
Treasury, and therefore the U.S. Mint under it,
the authority to conduct research and testing of
potential metals for coins. This was a
clarification measure Moy sought. He may not
have expected, however, the added legislating
guidelines to provide biennial reports to
In short, new legislation would need to be
drafted and passed for different metals in
dimes, quarters, half-dollars or dollar coins.
In summary, H.R. 5512 in its current state:
would likely result in a steel penny with the
downside that there may be a better metallic
alternative, but not enough time to implement
will not likely result in a steel or other new
metallic nickel any time soon,
would give the U.S. Mint the power to officially
research and test other metals for coins
would require new reporting by the Mint to
it would still hamstring the Mint in making
future metal composition changes to keep coin
manufacturing prices down.
Director Moy said this week that the bill was
“too prescriptive.” An apt analysis.
H.R. 5512 seems to be a document shrouded in
Congressional micro-management, with little hope
of altering the dysfunctional system that has
resulted in the penny and nickel losing money
for nearly two years now. The legislation may
"fix" the penny. It probably won’t fix the
nickel. And it does little to encourage
modifying the composition of other coins to make
them less expensive down the road.
Reports indicate that Senator Wayne Allard of
Colorado is expected to introduce another
version of the legislation in the Senate.