Trump goals at ‘wasteful’ spending by ordering finish to penny manufacturing
U.S. President Donald Trump meets with Japan’s Prime Minister Shigeru Ishiba (not pictured) on the White Home in Washington, U.S., Feb. 7, 2025.
Kent Nishimura | Reuters
President Donald Trump ordered a halt to the manufacturing of recent pennies, which he stated will assist scale back “wasteful” authorities spending.
“For much too lengthy america has minted pennies which accurately price us greater than 2 cents,” Trump stated in a Reality Social publish. “That is so wasteful! I’ve instructed my Secretary of the US Treasury to cease producing new pennies. Let’s rip the waste out of our nice nations funds, even when it is a penny at a time,” Trump wrote.
It is not clear whether or not the president has the authority to cease the manufacture of the 1-cent coin. Based on the U.S. Constitution, coinage energy, as acknowledged by the Supreme Court docket, is “unique” to Congress. Federal legislation says the Treasury secretary can mint and subject cash as mandatory for the wants of america.
However not less than one analyst on Wall Road expects that the penny’s days are numbered. TD Cowen’s Jaret Seiberg stated the halt will seemingly go judicial evaluate, resulting in a scarcity of the coin.
“We imagine this order would survive judicial evaluate, which is why that is more likely to happen,” Seiberg wrote Monday. “We fear about this resulting in a scarcity of pennies, which may power retailers to pay banks extra for cash. It additionally provides authorized danger for retailers and banks. That might create the disaster wanted to power Congress to behave.”
Seiberg stated he expects this might help the transfer towards digital funds, bolstering firms equivalent to Visa, Mastercard and different real-time fee networks.
What is evident is that pennies price extra to make than they’re price. In 2024, the U.S. Mint spent 3.69 cents to fabricate every penny, in keeping with an annual report. That meant the price of every penny has run above its face worth for a nineteenth straight fiscal yr.
The most recent U.S. Mint report suggests the nickel higher watch its again, too. Every 5-cent piece prices the Mint 13.78 cents to make.