President Trump ends penny production, saving taxpayers millions in wasteful spending as each penny costs nearly four times its face value to produce.
Key Takeaways
- The U.S. Treasury Department is halting penny production at President Trump’s direction, with the final batch of penny blanks already ordered.
- Each penny costs 3.69 cents to produce—nearly four times its face value—making continued production financially unsustainable.
- The cessation of penny production will save approximately $56 million annually in material costs alone.
- Approximately 114 billion pennies currently in circulation will remain legal tender as businesses transition to rounding transactions to the nearest 5 cents.
- The decision has bipartisan support as penny production costs have increased by 20% in fiscal year 2024 alone.
Trump Directs Treasury to End Wasteful Penny Production
President Donald Trump has instructed the Treasury Department to cease penny production, addressing a longstanding financial drain on taxpayer resources. The decision comes as production costs have soared to 3.69 cents per penny, creating an unsustainable situation where each coin costs nearly four times its face value to produce. This financial disparity has been worsening, with production costs increasing by more than 20 percent in 2024 alone, making the penny an increasingly expensive government liability rather than a useful currency denomination.
“For far too long the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful! I have instructed my Secretary of the US Treasury to stop producing new pennies,” Said President Donald Trump, U.S. President.
The Treasury Department has already placed its final order for penny blanks this month, with production set to continue only until the existing inventory of blanks is depleted. New pennies will enter circulation early next year before production ceases permanently. Despite the end of production, the approximately 114 billion pennies currently circulating throughout the United States will remain legal tender indefinitely, with no plans to withdraw them from circulation or devalue existing coins.
Economic Impact and Cost Savings
The decision to halt penny production is expected to generate significant cost savings for American taxpayers. The U.S. Mint anticipates saving approximately $56 million annually in material costs alone, with additional savings expected from repurposing facilities currently dedicated to penny production. This represents over $100 million in savings annually. This financial relief comes after 19 consecutive years during which both pennies and nickels have cost more to produce than their face value, representing a persistent drain on the Treasury that has finally been addressed under the Trump administration.
“Minting pennies costs the American taxpayer millions every year – nearly four times more than the pennies are worth. No private business would produce something at a 4x loss. It’s time to stop wasting Americans’ hard-earned tax dollars making overpriced pennies,” Stated Sen. Mike Lee
The penny’s composition has evolved significantly since it was first introduced in 1792 as one of the first coins produced by the U.S. Mint. Originally made mostly of copper, today’s penny consists of 97.5 percent zinc with just 2.5 percent copper plating, a change implemented to reduce production costs. Despite these material adjustments, rising commodity prices have continued to drive up manufacturing expenses to unsustainable levels, making the elimination of penny production an economically sound decision.
Bipartisan Support and Implementation Plans
The “Make Sense Not Cents Act,” introduced with support from lawmakers across the political spectrum, provided legislative authorization for ending penny production. The cessation aligns with recommendations from a Federal Reserve study that suggested a gradual shift away from pennies to avoid potential disruptions in the economy. Businesses will need to implement rounding practices for cash transactions to the nearest 5 cents, similar to the approach taken by other countries that have eliminated their lowest-denomination coins.
The United States joins several other nations, including Canada, that have discontinued similar low-value coins due to excessive minting costs and diminished purchasing power. While the nickel also costs more to produce than its face value—13.78 cents per coin in fiscal year 2024—there are currently no plans to discontinue it. The decline in penny production has been evident for years, dropping from over 9.36 billion in 2015 to just 3.22 billion last year, reflecting diminishing demand and economic utility.
