In Conversation Episode 2 Does The Cost of a Cent Make Sense?

Foreign I'm Chuck Woolery and I have a question For you When you look at a penny what do you Think it's worth A penny right Right but how much does that actually Cost to make that penny Welcome to in conversation and this week Former directors of the United States Mint Philip deal and Ed boy discuss the Production of the one cent coin and why It still matters today even though it Costs over two cents to met each one And wouldn't you were at the mint a Penny cost about 2.4 cents yeah produce Yeah It's ever been is that right yeah well a Penny is worth a penny yeah so that you Know you had a highly unprofitable Product there and of course you didn't Control what to do about the penny Um really why do you think that the Penny continues to be produced over all These years now it said that's a really Good point and you know as former mint Directors I'm sure for you as for me uh One of the questions most asked uh when People find out that our mint director Is what are we going to get rid of the Panic right so so we're pretty practiced In uh in understanding this issue yeah Under my tenure uh the penny reached a High cost uh the highest it's ever been

To produce a penny and the Federal Reserve basically through an accounting Measure Um means that we lose uh if the penny Costs 2.4 cents to make is 1.4 cents to Make it right and when you make eight Billion pennies or 10 billion pennies a Year that adds up to some real Money you know I think there's uh and we Tried to change it uh by the Constitution gives the authority to Change it uh to Congress right they're Responsible for regulating it Determining its weight its measures Etc and Um uh the most that I could get was to Get Congress to pass legislation Authorizing me to investigate uh options It started under my tenure but ended uh After I left I think there's a lot of Reasons why the Penny's still around First of all it's just hard to get Things through Congress because even Though you're losing 80 million dollars A year on one single product line uh 80 Million dollars is pittance compared to A 4 trillion dollar budget I think another reason that there's some Challenges is that we're losing money on The nickel now too we break even roughly On the dime but we make money on the Quarter and we make money on the dollar Coin and those profits uh more than uh Outweigh whatever losses our coins are

So every company has a couple lost Leaders or products that they're not Happy with but overall as long as the Company is profitable which the mint is You want to change that but there's no Urgency to change that yes you know in My experience too is you know Congress Has bigger fish to fry but also lobbying Makes a difference there are a lot there Are Financial interests behind the penny That are you know the U.S mint acquires Blanks that from the private sector they Have an interest in US continuing to Produce a penny some of those folks are In important states where they have very Strong representation and uh in Congress And then there's the zinc manufacturers The Metal Men minors all of those have An interest a stake and US continuing to Produce a penny and so that's another Layer that I saw that prevented us from Uh from acting on that or congress Acting I have another example too when Right about the time I let the mint There was a woman at the White House who Left the White House and went became a Writer on The West Wing and she asked me If I would make a contribution to one of The episodes okay so I wrote an episode A treatment and of foreign episode about The elimination of the penny and was Able to tell in sort of a comedy fashion But also as an insight into Washington About why it hadn't been eliminated and

In this episode there was a member of Congress who almost got it done but as He was getting it done the Speaker of The House stepped in and killed it and The reason was because the speaker of The house was from Illinois and in fact At the time the speaker of the house was From Illinois and Lincoln sits on the penny and the uh Speaking of the house from Illinois Didn't want to eliminate Lincoln uh from His seat on American coinage what a Great storyline right yeah and it makes A lot of sense maybe you have a a new Career It's been blossom Well the there's all on other aspect uh That I think keeps the penny around or At least practically makes sense to some People to you and I uh it it makes a lot Less sense right because we use credit Cards a lot yes I'm even comfortable Using a credit card now for a low value Purchase right uh but uh 17 percent of America is unbanked which means they Don't earn enough money that a bank Actually wants them as a customer and so They're primarily dealing in a cash Economy and to them uh when they buy Something for you know uh for 9.17 and They give a uh a ten dollar bill they Want all that change yes right and so uh To them a penny still matters and by Cutting out the penny like when India

Recently uh cut out I forget what Rubble Note but it hurt a whole bunch of people Who depended on on that on that piece of Currency yes so so I do think that there Are some consequences to Charities also Um are very dependent on our on our coin Jars and uh and so they would be hurt Too uh but uh It would be nice to make the penny into Something out of a material that would Bring the cost down but uh with even the Cheapest which is steel it would be near Impossible to do it you'd have to look At other things like Plastics or polymers and those might not Go through coin accounting machines They've got a whole different set of Problems if we went to a cheaper Material is is and you know you looked At this I mean were there any solutions To this problem well no we didn't we Didn't find any Um the well the solution was to get rid Of the penny and we I think we came to The conclusion that a lot of the Arguments that the lobbyists use against Uh against eliminating the penny were Really self-serving and didn't stand up To scrutiny and so I you know the Argument I would make is there it's hard To think of a product of any kind in America that is as ubiquitous as the Penny and is disposable as the penny It's a unique combination and it makes

An argument against the continued Production visit Usmoneyreserve.com for more information On precious metals coins and precious Metal IRAs America's gold Authority U.S money Reserve is proud to be a leading Distributor of government issue Gold Silver Platinum and Palladium For over 20 years hundreds of thousands Of clients have placed their trust in The company to help select the highest Quality and most appropriate precious Metals for their portfolios So whether you're a first-time buyer or Looking to expand your current portfolio U.S money Reserve is committed to Bringing you a superior customer Experience I'm Chuck Woolery Thank you for watching in conversation