Dollar Bills vs. Coins

March 2011, the GAO released a report stating that “the transition to an all-coin dollar would initially cost the nation money, although long-term savings would ultimately be realized.” See here for a longer discussion of GAO reports on this subject.

In December of 2011, the US Mint decided to curtail production of dollar coins. It apparently had “enough $1 coins sitting in Federal Reserve vaults to meet demand for a decade, and the inventory was on track to hit two billion by 2016.” According to VP Joe Biden, “Nobody wants them.”

The decision is a milestone of sorts in a long-running battle between those who think it is wasteful to keep printing dollar bills that wear out and have to be replaced frequently, and those who hate the $1 coin and see it as the real waste of money because Americans don’t like them.

The dollar-bill and dollar-coin camps have been waging war in Washington for years. A band of House
Republicans is backing the Currency Optimization, Innovation and National Savings (COINS) Act that would eliminate the dollar bill. The two senators from Massachusetts…countered with the Currency Efficiency Act, which aimed at curtailing what they said was “massive overproduction” of “the unpopular one dollar coin.”

In March of 2012, there was a huge advertising push  on behalf of Americans for George, “a diverse coalition of corporations and special interests arguing for the preservation of the dollar bill.” While Americans for George never hired lobbyists, “member organization Crane and Co. … has spent anywhere from $40,000 to $90,000 each year on federal lobbying efforts.”

In May 2012, Americans for George pulled all advertising, shut down websites and twitter feeds, and seems to have ceased all activity.

A source close to the situation tells PI that Crane & Co. has pulled its funding for Americans for George as a
cost-cutting measure — private equity company Goldberg Lindsay & Co. has a minority stake in Crane — effectively
killing the organization.

Major Players: 

  • Pro dollar bill
    • Senators Scott Brown (R-MA) and John Kerry (D-MA)
    • Senator David Vitter (R-LA)
  • Pro dollar coin
    • Tom Schatz, president of Citizens Against Government Waste
    • Dollar Coin Alliance (which includes Schatz’s org., the vending machine trade association [National Automatic Merchandising Association], and the steelworkers’ union), called “an upstart and moneyed lobby” in Politico
    • Rep. Jim Kolbe (R-Arizona) and Rep. David Schweikert (R-Arizona)

Quotes from the debate:

Doug Crane, December 2011

“There is more convenience in the form factor for the paper dollar and people are quite attached to how well it works. Coins tend to be a nuisance. They end up in jars or seat cushions.”

Randy DeCleene, Americans for George Spokesperson, March 2012

“When you think of American symbols, there’s the flag and the dollar bill. We want to fight for the dollar bill, and we’re going to have a more aggressive public face as we continue.”

Randy DeCleene, May 2012

“I don’t really have anything to say because I’m not the spokesman for Americans for George any longer.”

Shawn Smeallie, lobbyist for Dollar Coin Alliance, May 2012

“I bet they’re a little nervous that a high profile is going to reveal their weakness that they’re a sole-source provider for the government. It’s an interesting play for them … we’re happy to have them off the field.”

______________________________________________________________________________

Associated Press. “Crane Still Ahead in Paper Chase.” Worcester Telegram & Gazette. 19 November 1998.

Levinthal, David. “Dollar coin lobby makes rain on hill.” Politico. 14 December 2011.

Levinthal, David and Anna Palmer. “Dollar bill lobby disappears.” Politico. 25 May 2012.

—. “Lobby hollering to save dollar bill.” Politico. 9 March 2012.

Sparshott, Jeffrey. “The Buck Stops Here: $1 Coins to be curtailed; Dead presidents go way of Sacagawea.” The Wall Street Journal (Online). 14 December 2011.

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Comments
3 Responses to “Dollar Bills vs. Coins”
  1. JP says:

    You didn’t feel like mentioning Pro Dollar Coin Senator John McCain, who is a co-sponsor for S. 2049? It’s about time that we make the switch to dollar coins. They’re incredibly handy and I’ve been using them for about two years now instead of dollar bills.

  2. dem says:

    It is interesting, though, how this debate comes back to geographical special interests: the senators from Massachusetts, where Crane & Co. is located, back the dollar bill. The various current and former senators (including McCain) and representatives from Arizona — the largest producer of copper in the U.S. — back the coin.

    Cotton-linen blend or copper, a dollar is still a dollar, and a basically abstract concept. But the jobs created, and other revenues provided locally, by the need to make those bills or provide metal or those coins, has very real, very tangible value.

  3. adam says:

    Why dont they create a 5, 10, and even a $20 dollar coin and just replace the paper system all together. It would add value to our currency.

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