Trump Targets Wasteful Government Spending by Ending Penny Production

U.S. President Donald Trump recently announced an initiative to stop the production of new pennies, arguing that this action is a significant step toward reducing what he describes as "wasteful" government spending.

In a post on Truth Social, Trump stated, "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. Let's rip the waste out of our great nation's budget, even if it's a penny at a time."

This directive raises questions about the president's legal authority to halt the manufacturing of currency. The U.S. Constitution grants the power to coin money exclusively to Congress. According to federal law, the Treasury Secretary holds the responsibility to mint and issue coins as needed.

Despite these legal complexities, financial analysts suggest that the end of penny production could be within reach. Jaret Seiberg from TD Cowen indicated that he believes the measure could withstand judicial scrutiny, leading to a potential shortage of pennies in circulation.

Seiberg commented, "We believe this order would survive judicial review, which is why this is likely to occur. We worry about this leading to a shortage of pennies, which could force merchants to pay banks more for coins. It also adds legal risk for merchants and banks. That could create the crisis needed to force Congress to act." He also forecasted that this move could accelerate the transition to electronic payment systems, benefiting companies like Visa and MasterCard.

The financial burden of penny production has been a significant issue, as evidenced by the latest U.S. Mint report. In 2024, the Mint reported that the cost to produce a single penny rose to 3.69 cents, marking the 19th consecutive year that the production cost has exceeded the coin's face value. The situation is similar for the nickel, which currently costs 13.78 cents to produce.

Implications of Stopping Penny Production

President Trump's push to end penny production signifies a broader critique of government expenditures. By focusing on the penny, he is drawing attention to the idea that even the smallest costs can accumulate to create significant waste within the federal budget.

Furthermore, the potential discontinuation of the penny may provoke discussions in Congress regarding the relevance and necessity of other low-denomination coins like the nickel.

The Future of Currency in America

As cash transactions decline and electronic payments gain popularity, the end of penny production may symbolize a shift in the way Americans use money. If pennies become scarce, it could alter pricing structures and financial interactions at the retail level.

In summary, while the initiative to stop coining new pennies may seem minor, it reflects a significant conversation about government spending, legal authority, and the evolving nature of currency in today's economy.

Trump, Penny, Spending