Kill the Dollar Coin — Long Live the Dollar Coin!

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Sens. Harkin and McCain introduced legislation to kill the dollar bill and replace it with dollar coins.

The U.S. government has a love/hate relationship with the $1 coin. At the same time as the U.S. Mint is scaling down production of the largely unwanted presidential dollar coins, two U.S. senators are introducing legislation that would kill off the dollar bill completely and replace it with … you guessed it: $1 coins.

This week, Sens. Tom Harkin (D-Iowa) and John McCain (R-Ariz.), in a rare glimpse of bipartisan agreement, introduced legislation that would bring about the death of the dollar bill.

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A few months back, the 12-member Joint Committee on Deficit Reduction (a.k.a. the “supercommittee” tasked with restoring the nation’s financial footing) was reportedly considering a proposal that would phase out the dollar bill and replace it with a dollar coin. Nothing much was reported about the issue until this week.

On Tuesday, the two senators introduced the Currency Optimization, Innovation and National Savings, or COINS, Act. (Those legislators are oh-so clever with the acronyms!) It’s similar to a House bill that has gone nowhere since last fall, and it would promote the very same presidential dollar coin that is so unpopular that $1 billion worth of them are sitting unused in government vaults. Yes, the same dollar coin that was part of a program the Obama administration axed in December.

The reason Sens. Harkin and McCain are championing the dollar coin is because they believe it will save the federal government money in the long run, even more than is projected to be saved by axing the presidential coin program.

According to the U.S. Treasury, 40% of dollar coins are returned to the government. Those coins, along with a bunch of coins with presidents on them that we don’t care about anymore, are just sitting in government vaults, unwanted and unused.

But the dream of the $1 coin keeps coming back, a currency zombie that won’t die. And that’s largely because the Government Accountability Office projects that replacing the dollar bill with a coin could save the government $5.5 billion over 30 years. Considering our serious debt and deficit problems, the idea still has currency with some lawmakers. (See, I can be clever, too.)

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The legislators are essentially counting on the American people getting used to using a dollar coin, especially if there’s no other choice. The Senate bill sets a four-year deadline to stop production of paper dollars.

Meanwhile, other legislators have written bills that would save bills. (Ok, I’m done.) Sens. Scott Brown (R-Mass.) and John Kerry (D-Mass.) have written the Currency Efficiency Act, which is aimed at stopping the overproduction of the “unpopular one dollar coin.”

Considering how things have been going in Washington lately, this fight probably won’t be resolved any time soon.