Future of the Penny: Options for Congressional Consideration

GAO discussed the continued production of the U.S. penny. GAO noted that: (1) Congress needs to address several issues in deciding the future of the penny; (2) the government spent $8.5 million to $9.2 million in fiscal year (FY) 1994 distributing and handling pennies; (3) public attitudes towards the penny are mixed, but the majority of the public supports retaining the penny; (4) in FY 1995, almost 66 percent of pennies did not circulate compared to almost 12 percent of quarters; (5) it could not determine the full budgetary impact of eliminating the penny, but the U.S. Mint would be negatively impacted if billions of pennies were returned; (6) eliminating the penny would result in the loss of jobs for the two contractors who produce zinc penny blanks and for other related businesses; (7) states' ability to collect sales taxes would not be affected by the elimination of the penny, but charitable donations might be affected; (8) penny production and disposal cause no significant environmental problems; (9) proposed legislation would provide a framework for rounding to the nearest nickel and would exempt noncash transactions from the rounding requirement; and (10) military facilities in Europe eliminated the penny in 1980 and received few complaints.