A Dollar Coin Could Save Millions

GAO discussed the proposed reintroduction of the 1-dollar coin. GAO noted that: (1) all major Western economies now use a coin for monetary transactions at the same level that Americans use the paper dollar; (2) the United States introduced the Susan B. Anthony 1-dollar coin in 1979, but it was not widely accepted by the public, mainly because the dollar note was not simultaneously eliminated; (3) the government could save about $456 million annually over 30 years by substituting a coin for the 1-dollar note, since the coins would be used longer, the processing costs would be lower, and interest on the federal debt would be lower due to seigniorage (the difference between the face value of a coin and the cost to produce it); (4) to ensure the successful conversion to the 1-dollar coin, the dollar note would have to be eliminated, a transition period with a public awareness campaign would be needed, the coin would have to be easily distinguished from other coins, and congressional support would be needed to offset the initial negative public reaction; (5) the Department of Treasury believes that Congress will bow to public resistance to the dollar coin and allow it to co-circulate with the dollar note, which will result in Treasury having billions of dollar coins on hand that will not be accepted by the public; and (6) foreign countries reported that they faced initial public resistance to conversions from notes to coins, but this was expected and could be overcome if properly managed.