In a bid to reduce government waste, U.S. President Donald Trump announced on Sunday that he has directed the Treasury to halt the production of penny coins, citing their high production costs relative to their face value.
“For far too long, the United States has minted pennies, which literally cost us more than 2 cents each. This is so wasteful!” Trump wrote on his Truth Social platform. “I have instructed my Secretary of the U.S. Treasury to stop producing new pennies. Let’s rip the waste out of our great nation’s budget, even if it’s a penny at a time,” he added.
The move aligns with Trump’s broader efforts to cut federal spending, a key focus of his administration. The Department of Government Efficiency (DOGE), a cost-cutting initiative led by billionaire Elon Musk, highlighted the disproportionate cost of producing pennies in a post on X (formerly Twitter) earlier this year. According to the DOGE, each penny costs more than twice its face value to manufacture, making it an inefficient use of taxpayer dollars.
The debate over the penny’s production cost is not new. Over the years, several bills have been introduced in Congress to eliminate or modify penny production, but none have gained enough traction to pass. While Trump’s directive would likely require congressional approval, some experts, such as Northeastern University economics professor Robert Triest, suggest that Treasury Secretary Scott Bessent might have the authority to halt penny production unilaterally.
If the penny is phased out, prices in the U.S. would likely be rounded to the nearest five cents, a practice already adopted by countries like Canada. In 2012, Canada eliminated the penny from its coinage system, citing a production cost of 1.6 cents per penny and its declining purchasing power due to inflation.
Trump’s push to eliminate the penny is part of a larger effort to streamline government spending. The DOGE team, led by Musk, has been tasked with identifying inefficiencies and reducing federal expenditures. However, some of the administration’s cost-cutting measures, such as reducing the headcount at the U.S. Agency for International Development (USAID), have faced legal challenges from Democrats and labor unions.
While the elimination of the penny may seem like a small change, it reflects Trump’s commitment to tackling government waste, even in seemingly minor areas. Whether this move gains traction or faces opposition in Congress remains to be seen, but it has already reignited the long-standing debate over the relevance and cost of the penny in modern currency systems.
