(Washington, D.C.) – Today, Tom Schatz, president of the Council for Citizens Against Government Waste (CCAGW), issued a letter to members of the United States House of Representatives urging them to support the Currency Optimization, Innovation and National Savings Act of 2011 (COINS).  This bipartisan bill will phase out the $1 note and transition to the $1 coin.  The letter reads in part:

“On March 4, 2011, the Government Accountability Office (GAO) issued a report highlighting the substantial benefits of discontinuing $1 notes in favor of $1 coins.  This money-saving idea has been touted by CAGW in its annually-updated Prime Cuts database for years.  According to the GAO, phasing out the $1 note and increasing circulation of the $1 coin would save taxpayers an average of $184 million annually and a total of $5.5 billion over the next 30 years.  The GAO has published four previous reports on the benefits of the $1 coin, in 1990, 1993, 1995 and 2000, twice recommending the elimination of the $1 note to ensure the success of the coin.

“Most of the cost savings associated with coins comes from their comparative durability.  The Bureau of Engraving and Printing produces approximately 3.4 billion $1 bills each year, each of which costs 4.2 cents to manufacture and lasts 40 months.  By comparison, the $1 coin costs between 12 and 20 cents but has a lifespan of 30 years or more.  The $1 coin also saves money because it is cheaper to handle and process.  Mass transit agencies have found that processing $1 coins costs 83 percent less than processing $1 bills.  Other benefits include savings on the processing of money by banks and businesses.  Coins cost 30 cents per thousand pieces to process at Federal Reserve Banks, compared to 75 cents per thousand for $1 notes.  Large-scale private-sector users reap even more savings.  Coins are also much more difficult to counterfeit.

“The Federal Reserve and the U.S. Mint are already required by law to remove barriers to the $1 coin’s circulation.  However, the Federal Reserve issues the United States’ paper currency and doesn’t like the competition from the $1 coin, which is issued by the Mint.  The Fed’s leaders have instituted regulations and red tape that restrict access to $1 coins for banks, businesses, and individual Americans.  These policies have resulted in the continued circulation of $1 notes, nullifying nearly all of the cost reductions $1 coins would otherwise create.  Conversely, countries in Europe have achieved currency production savings by substituting coins for bills on their lowest-denominated currencies.

“Rep. Schweikert’s legislation to phase out the $1 bill in favor of the $1 coin should be an easy decision for elected officials in Washington, who are looking everywhere for ways to reduce the record deficit and debt.”

The Council for Citizens Against Government Waste (CCAGW) is the lobbying arm of Citizens Against Government Waste, the nation’s largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.