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U.S. Treasury to Phase Out Penny Production: Americans to Start Rounding Prices
The penny's days are officially numbered. In a move aimed at curbing unnecessary government spending, the U.S. Treasury Department has confirmed it will cease production of the one-cent coin, marking a significant shift in American currency policy.
According to Treasury officials, the final batch of penny blanks—metal discs used to mint the coins—has already been ordered. These will be the last newly minted pennies to enter circulation, expected to roll out in early 2026. Once current supplies are exhausted, businesses will begin rounding transactions to the nearest five cents.
Financial Impact and Rationale
Though the penny has long been a fixture of U.S. currency, it has become increasingly expensive to produce. In 2024, each coin cost 3.69 cents to mint—nearly four times its face value. Senator Mike Lee (R-Utah), a vocal supporter of the move, said, “No business would accept a 4x loss on any product. It's time we apply that same logic to government spending.”
By halting penny production, the government expects to save approximately $85 million annually. Of that, $56 million comes directly from reduced material costs, with the remainder saved through lower facility and processing expenses.
A Penny Problem Years in the Making
The composition of the penny has evolved over the years. Once primarily made of copper, the coin has since shifted to a zinc core with copper plating. Despite the change, costs have continued to rise. As of 2021, over 50% of the U.S. Mint’s coin output was still dedicated to penny production—a focus many economists have long questioned.
A 2022 Federal Reserve study warned that abruptly removing the penny could cause a rush of redemptions. It instead recommended a gradual phase-out to protect financial stability while capturing long-term savings, estimated at over $100 million.
Trump’s Push for Cost-Cutting
Former President Donald Trump, a long-time critic of wasteful federal expenditures, called for the penny's end earlier this year. “Every dollar matters,” he said in February. “Let’s rip the waste out of our nation’s budget—even if it’s a penny at a time.”
What’s Next for Consumers and Retailers?
The transition will likely push retailers to adjust pricing systems, rounding totals to the nearest nickel. Though electronic transactions will remain unaffected, cash purchases could see slight variations in total amounts.
As of now, there are more than 114 billion pennies in circulation, with nearly $200 million spent annually to produce them. While these coins will remain legal tender, their time in tills and wallets may soon come to an end.
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An inspector general for the Treasury Department has confirmed it’s going to investigate whether or not Florida Gov. Ron DeSantis (R) improperly used funds meant for coronavirus aid to move migrants, The Washington Post reports.
In a Friday letter sent to Sen. Ed Markey (D-Mass.) and other members of Congress, Deputy Inspector General Richard K. Delamar wrote, “We will review the allowability of use of [State and Local Fiscal Recovery Funds] related to immigration generally, and will specifically confirm whether interest earned on SLFRF was utilized by Florida related to immigration activities, and if so, what conditions and limitations apply to such use.”
The letter was in response to an inquiry from Markey and other members of Congress who have been concerned that the spending DeSantis authorized “violates federal law,” per the Post. DeSantis stated he would rely on a $12 million fund in the state’s budget to pay to fly migrants out of Florida. The Post previously reported that the cash was really interest earned on the over $8 billion in funding the state acquired as a part of the American Rescue Plan, the last federal stimulus package.
Last month, DeSantis sent two chartered planes carrying roughly 50 migrants to Martha’s Vineyard in Massachusetts. He and fellow GOP Gov. Greg Abbott of Texas have garnered criticism from many for shipping migrants to designated sanctuary cities in protest of President Biden’s immigration policies.
A Texas sheriff announced that his department was opening an investigation into DeSantis’ flights, seeing as as they originated in San Antonio. The letter from the Treasury is the first public acknowledgment that the federal government is investigating the transports, Politico reports.
Source: Treasury Department confirms investigation of DeSantis’ migrant transport
