New Coins to Make Billions for Federal Government
Washington
| December 30, 2006 -
When people ask me why I spend some of my time sponsoring bills such as
the 50-state quarter legislation and most recently, the Presidential $1
Coin Act, I immediately think of the billions of dollars generated in
savings for the federal government. The 50-state quarter program alone
has saved the government $6 billion to date and it is estimated the
newly redesigned $1 coin may save at least $5 billion. Not many
Members of Congress -- if any -- can say they've done the same.
The billions of dollars are saved through a process called
seigniorage, where the U.S. government earns money on each coin that is
produced and enters the public arena through a financial institution or
the purchase of a collector's sets from the U.S. Mint. For example, it
will cost the U.S. Mint approximately 21 cents, depending on the cost
of materials, to make each dollar piece. This means that the
government will make 79 cents from each dollar that enters
circulation. As the public seeks to collect these new dollar coins,
and therefore pulls them out of circulation, more coins will need to be
generated to meet the demand - creating the pattern of demand and
revenue for the government. Money will also be generated by the sale
of the First Spouse gold bullion coins. These savings will reduce
interest on the debt, something we should all support.
For this reason, I look forward with excitement to February 2007 when
the Presidential $1 Coin will first be released. The law I wrote
creating this program calls for a circulating one-dollar coin program
with a regularly changing design, featuring the Presidents of the
United States in the order in which they served, with a new design
every three months. The reverse of the coin will feature a dramatic
image of the Statue of Liberty.
Along with the benefits of the savings to the federal government there
are other positive aspects of this new program such as the education
the coins provide for children and adults alike and the increase in
circulation of the dollar coins.
These new coins will serve as history lessons for countless students
throughout the United States -- not only will they learn about the
different Presidents and their legacies but also the time period in
history during which they served. I have recently visited two schools
in Delaware to share the new designs with fourth grade students and I
have been pleasantly surprised by their knowledge of the Presidents,
and by their excitement for the new coins to collect. Many of the
students already collect the 50-state quarters.
Finally, I believe the changing designs on this dollar coin will create
demand, keeping the coins in circulation and providing another means
for people to use the dollar denomination. The law requires the
capability to accept and dispense the new $1 coin by all Federal
Government agencies, the U.S. military, transit systems receiving
federal funds, and businesses operating on Federal Government premises
by January 1, 2008. Additionally, coins are designed to work with
existing vending machines that accept dollar coins. Finally, during a
six week period for each $1 coin release, financial institutions can
obtain unmixed quantities of that specific design to provide to
customers. Retailers and consumers should talk with their financial
institutions about their interest in the new Presidential $1 Coin
Program.
For all these reasons and more, I will continue to be a believer in
these programs and encourage everyone to collect the new dollar coins
and consequently, a bit of history while helping to save the U.S.
government billions of dollars.