Fed sits on $1 billion in dollar coins that no one wants

Politicians in Washington hardly let a few minutes go by without mentioning how broke the government is. So, it’s a little surprising that they’ve created a stash of more than $1 billion that almost no one wants.

Unused dollar coins have been quietly piling up in Federal Reserve vaults in breathtaking numbers, thanks to a government program that has required their production since 2007.

And even though the neglected mountain of money recently grew past the $1 billion mark, the U.S. Mint will keep making more and more of the coins under a congressional mandate.

The pile of idle coins, which so far cost $300 million to manufacture, could double by the time the program ends in 2016, the Federal Reserve told Congress last year.

A joint inquiry by NPR’s Planet Money and Investigations teams found that the coins are the wasteful byproducts of a third, failed congressional effort to get Americans to use one-dollar coins in everyday commerce.

In 2005, Congress decided that a new series of dollar coins should be minted to engage the public. These coins would bear the likeness of every former president, starting with George Washington. There would be a new one every quarter. So, far, the Mint has produced coins through the 18th president, Ulysses S. Grant.

Members of Congress reasoned that a coin series that changed frequently and had educational appeal would make dollar coins more popular. The idea came from the successful program that put each of the 50 states on the backs of quarters.

But as the new presidential dollar coins rolled out, the greenback lost none of its dominance in Americans’ hearts and wallets.

If the mandate to make presidential coins wasn’t enough to generate a growing heap of unwanted coins, a political deal ensured that even more unwanted coins would be produced.

It was easier for the bill’s sponsor, then-Rep. Mike Castle (R-DE), to move the presidential coin bill forward if it didn’t displace other dollar coins honoring Sacagawea, the teenage Native American guide to Lewis and Clark.

The deal: The mint would be required to make a quota of Sacagawea coins. Currently, the law says 20 percent of dollar coins made must have Sacagawea on them.

So, there are now about 1.2 billion dollar-coin “assets” chilling in Federal Reserve vaults, unloved and bearing no interest. By the time the presidential coin series finishes, and there are coins honoring all past presidents, there could be 2 billion.

Several congressional leaders contacted by NPR declined to comment for this story.

The Senate Banking, Housing and Urban Affairs Committee has jurisdiction over coins. Its chairman, Tim Johnson (D-SD), would not agree to be interviewed about dollar coins.

Neither would the committee’s ranking member, Republican Richard Shelby of Alabama, who recently requested a Government Accountability Office study on dollar coins.

Both the Mint and the Federal Reserve provided information for this story, but neither agency would agree to an on-the-record interview.

The finances of all of this? You could say the government has wasted money to make money.

Some 2.4 billion dollar coins have been minted since the start of the program in 2007, costing taxpayers about $720 million. The government has made about $680 million in profit by selling some 1.4 billion dollar coins to the public since the program began.

Still, it’s the program’s waste that hits home when you’re staring at millions of unused coins.

The Inner Sanctum

Inside one basementlike Federal Reserve vault in Baltimore, NPR was able to see 45 million $1 coins of various types. The coins were overflow from vaults elsewhere.

And despite a national indifference to the coins, they were heavily guarded.

A group of journalists from NPR passed through a metal detector and special secure doorway before reaching the inner entrance to the vault, a fence gate secured by two common Master padlocks.

Two staffers minding the coins each had a key to one of them, and as the NPR group moved around the vault, the minders kept the group physically surrounded.

Inside the vault, dollar coins languished in clear plastic bags piled high on sturdy metal pallets that looked like baby cribs.

Through the bags, one could see Sacagawea mingling with Suffragette Susan B. Anthony and rubbing edges with some of America’s early chief executives. Glaring fluorescent lights coaxed an occasional shimmer from the dollars, which are made mostly of manganese brass and have a gold color.

One row of pallets bore a handwritten note that said, “Dollars … 48 skids … 6,720,000.”

But how many of them will ever see a laundromat, soda machine or toll booth?

Without an overhaul to the cash system that completely substitutes coins for bills, very few.

Try, Try Again

After the Susan B. Anthony and Sacagawea series lost their bids to become America’s pocket change sweethearts, the presidential series was the next big idea.

But in a report to Congress last year, the Federal Reserve said the coins are now being held “with no perceivable benefit to the taxpayer,” and that banks are sending them back to the Fed in increasing numbers.

“We have no reason to expect demand to improve,” the Fed said. “We also note that a 2008 Harris poll found that more than three fourths of people questioned continue to prefer the $1 note.”

Still, dollar coin proponents, including some advocacy groups and vending-based industries, are undeterred.

Leslie Paige, who represents watchdog group Citizens Against Government Waste, says the government should withdraw the dollar bill from the market and force Americans to use the coins.

“I think Americans will definitely embrace the dollar coin if they’re just given the opportunity,” she says.

As for the Harris Poll showing Americans don’t want dollar coins, Paige says, “I suspect that they just don’t understand what the up sides are,” including the fact that coins don’t need to be disposed of as bills are.

“The idea that, ‘Oh, I don’t want them jingling in my pocket,’ I mean, I don’t know, most people carry quarters with them,” Paige says. “They use them for meters and all kinds of other things, so I certainly think Americans can adapt.”

Money-Saver Or Hidden Tax?

You may have heard that dollar coins are more cost-effective than dollar bills. Paige and other dollar-coin advocates point out that coins last longer than bills, and that’s why they save money. A coin could last 30 years, but a new dollar bill will be ready for the shredder in less than four years.

But if moving exclusively to dollar coins would save money, the question is, whose money? Certainly, issuing the coins and having them circulate, rather than sit in vaults, would create a source of revenue for the government.

Whether taxpayers would benefit is another matter.

A Government Accountability Office study out this spring says that switching to a dollar coin “would provide a net benefit to the government” of about $5.5 billion over 30 years.

But it’s not because coins are cheaper. The report says the government would not recover the cost of switching from bills to coins over that period.

Instead, the benefit to the government would come only from the profit it makes by manufacturing each coin for 30 cents and selling it to the public for a dollar.

When this profit, known as seigniorage, is factored out, switching to the dollar coin would actually cost taxpayers money over three decades, according to a Federal Reserve analysis of the GAO’s figures. The cost works out to $3.4 billion.

The Fed’s Louise Roseman wrote to the GAO that seigniorage should not be considered in an analysis of whether the switch would benefit the larger U.S. economy.

The reason, says Roseman, director of the Fed’s Division of Reserve Bank Operations and Payment Systems, is that seigniorage “is a revenue transfer from the private sector to the government.”

So, in other words, a tax? The profit to the government predicted by the GAO assumes that the government would have to issue 1.5 dollar coins for every dollar bill removed from circulation. That’s because people handle coins differently than they do bills.

Even if all dollar bills were replaced with coins, some say the nation’s evident distaste for dollar coins will simply mean more small transactions will be done electronically. And, it could accelerate a technological trend toward payments with mobile devices.

Jack Weatherford, an anthropologist who wrote the 1998 book The History of Money, says he loves coins, but he doesn’t love the billion dollar coins piled up in the nation’s coin vaults.

“Destroy them,” he said. “People will not accept these coins. Nobody in America wants to use them. As long as they have a paper currency, they will use that.”

Of using coins to save money, Weatherford says that in an era of electronic financial transactions, “the argument is about 50 years too late. Coins have rapidly become less and less important in our society — like paper money itself is becoming less and less important.”

Buyer’s Remorse For Bill’s Proponents

Delaware’s Castle, who left Congress after a primary loss and now practices law, acknowledges that the demand for golden dollars didn’t materialize as he had hoped.

Castle says he and others knew when they were passing the bill that widespread adoption of dollar coins would be hindered by the continuing production of dollar bills. But he says that mandating a wholesale switch from bills to coins was politically untenable then, as it is now.

“It’s not quite like cutting somebody’s Social Security,” Castle says, “but politically it’s not something the members want to deal with, so it’s just very hard to get something like that done.”

When Congress was considering the law, the Congressional Budget Office warned that there would be low demand for the coins. The Federal Reserve Board cautioned that coin inventories and storage costs would increase.

Castle says the coins should continue to be produced, but in smaller numbers.

“It’s ridiculous to have this kind of over-inventory pile up,” he says. “I might actually make some phone calls myself as a result of reading these reports and learning more about what this problem appears to be.”

But what should happen to that quota for Sacagawea coins, for which there is very little demand, and which the Federal Reserve no longer orders from the Mint?

Earl Pomeroy, a former Democratic congressman from North Dakota who championed the quota while serving in the House, hedges a bit.

Pomeroy stands by his defense of “dear old Sacagawea.” But he acknowledges that there’s at least some folly in continuing to make coins that will not be used.

“I think the foolish part of the law may be not the Sacagawea part, but the fact that with no one picking up these coins, we’ve got to keep printing them because we’ve 浦汇 got to get through the rest of the presidents list,” says Pomeroy, who lost his bid for a 10th term in Congress last year. “That to me doesn’t seem to make any sense at all.

“Is the nation waiting with bated breath for us to get to the Calvin Coolidge coin? No! Maybe we should call a halt to this whole thing.”

Source:

lexapro benefits for women viagra for sale finasteride 1mg ciprofloxacin side effects after age 60 levitra rezeptfrei deutschland escitalopram oxalate viagra dosage cialis patent expiration date extended lexapro reviews finasteride tablets viagra from canada best price viagra cialis coupons printable cialis vs viagra generic cialis tadalafil viagra substitute lexapro and wellbutrin combination therapy cialis daily azithromycin 5 day dose pack cialis coupon 20 mg is azithromycin acyclovir dosage for cold sores cialis without a doctor’s prescription acyclovir side effects cialis from canada cialis for women cialis voucher ciprofloxacin bnf levitra 20mg cost per pill viagra medicine azithromycin pediatric dosing wellbutrin and lexapro azithromycin for uti ciprofloxacin used for tamoxifen therapy azithromycin 250mg tablets 6 pack tamoxifen and weight gain generic viagra what is ciprofloxacin online cialis lexapro dosing what does finasteride do acyclovir 400mg what is tamoxifen used for cialis cheap escitalopram nebenwirkungen viagra effects cyalis tamoxifen side effects ciprofloxacin hcl 500 mg tab levitra prezzo in farmacia acyclovir ointment 5 herbal viagra cialis discount what is cialis levitra vs viagra lexapro vs zoloft does lexapro cause weight gain finasteride side effects in men viagra pill cialis on line utilisation viagra propecia levitra 20 mg von bayer cipro dangers buy cialis online ciprofloxacin drug class finasteride for women azithromycine 250 mg cipro for uti azithromycin 500 erfahrungen lexapro and weight loss sex viagra for women generic levitra vardenafil 20mg what is finasteride used for ciprofloxacin 500 mg for urinary tract infection finasteride hair loss ciprofloxacin eye drops lexapro cialis for bph cialis pricing acyclovir for shingles side effects of tamoxifen generic levitra azithromycin 500 viagra 100 mg lexapro overdose propecia side effects levitra 10 mg prezzo tamoxifen cost cialis or viagra discount viagra lexapro withdrawal symptoms acyclovir dosage sophia viagra what works better than viagra viagra nebenwirkungen lexapro withdrawal levitra coupon equipe argentine viagra viagra without a doctor prescription azithromycin liquid discount cialis online viagra buy generic viagra finasteride 5 mg tab lexapro side effects in women levitra 20 mg precio farmacia ciprofloxacin side effects in women what is acyclovir for cialis coupon print viagra canada azithromycin pregnancy category cipro side effects vardenafil vs viagra azithromycin z pak azithromycin 250 mg zovirax for cold sores escitalopram 10 mg para que sirve zithromax antibiotic pfizer viagra cipro side effects in elderly viagra for sale uk female viagra buy levitra tamoxifen viagra alternatives first few days on lexapro cialis coupon effects of stopping lexapro suddenly ciprofloxacin dosage what is lexapro viagra bestellen cipro and tendonitis cialis generic tamoxifen side effects in women withdrawal from lexapro daily cialis cialis cost levitra generic canadian viagra how does viagra work cialis pills for sale finasteride 5mg tab acyclovir cream viagra ohne rezept aus deutschland azithromycin class cialis for men generic lexapro levitra bayer 20mg meilleur prix finasteride 5mg azithromycin drug class lexapro vs celexa viagra 100mg tablets retail price cialis 30 day trial coupon azithromycine ciprofloxacin hcl 500 mg side effects what does viagra do cialis generic tadalafil azithromycin dosage ciprofloxacin drops side effects of lexapro in women what is lexapro used for post finasteride syndrome finasteride reviews lexapro generic name escitalopram 10mg azithromycin 250 cipro dosage lexapro 5mg levitra online finasteride cialis professional generic cialis viagra generico acyclovir dose what is lexapro for cheap levitra escitalopram side effects viagra finasteride permanent side effects cialis dosage recommendations viagra en ligne livraison 24h acyclovir 800 mg for shingles generic cialis at walmart azithromycin tablets what is azithromycin used for ciprofloxacin uses cialis alternative ciprofloxacin 500mg viagra tablet side effects of ciprofloxacin viagra cialis what is finasteride cialis coupons 2017 escitalopram 10 mg cialis tadalafil cialis generic availability canadian cialis cialis pharmacy prices viagra sans ordonnance acyclovir vs valacyclovir cilias lexapro dosages cialis testimonials what is azithromycin for cipro antibiotic is tamoxifen chemotherapy viamedic cialis generic for lexapro where to buy viagra finasteride for hair loss levitra 20 mg cost walmart what is acyclovir generic viagra 100mg ciprofloxacin 500mg tablets lexapro 20mg finasteride side effects cialis prices finasteride dosage cialis copay card finasteride and enlarged prostate azithromycin 250 mg treatment ciprofloxacin dosierung azithromycine eg 500 mg bijsluiter lowest cialis prices cipro 500 azithromycin tablet levitra vs viagra for hardness what is cipro used for what is azithromycin canada cialis side effects of azithromycin free cialis cialis for sale tamoxifen bijwerkingen viagra vs cialis price cialis azithromycin eye drops viagra for women effects of stopping finasteride what is cipro cialis savings card zithromax cialis samples overnight ciprofloxacin side effects cialis pills lexapro dosage cialis patent expiration 2017 vardenafil 20mg viagra soft lexapro weight gain cialis ciprofloxacin tamoxifen and foods to avoid how to take cialis zithromax 500 mg cipro erectile dysfunction cialis lexapro for anxiety cealis acyclovir dosing how to get off lexapro what is acyclovir used for lexapro bula order viagra buying viagra ciprofloxacin hcl 500 mg cialis canadian pharmacy cialis online azithromycin medscape acyclovir for cold sores ciprofloxacin 500 mg tabletten lexapro 10mg nolvadex pfizer viagra coupons from pfizer zithromax z-pak acyclovir 800 mg 5 times a day cialis 20 mg zovirax pills escitalopram what is escitalopram viagra without a doctor prescription usa buy viagra online zovirax dosage how does acyclovir work viagra samples lexapro side effects men viagra price cialis dosage ciprofloxacin for dogs lexapro para que sirve buy levitra online cialis patent expiration viagra 100 what bacteria does ciprofloxacin kill side effects of finasteride 5mg what is viagra lexapro and weight gain in women side effects of cialis lexapro coupons cialis trial side effects lexapro wholesale cialis cialis sample how long for lexapro to work buy cialis azithromycin three times a week cialis 5mg viagra tesco is ciprofloxacin a penicillin what is ciprofloxacin used for lexapro side effects levitra coupons over the counter viagra zovirax ointment azithromycin coverage cialis website acyclovir ointment viagra natural finasteride 5 mg viagra 50mg side effects of finasteride viagra vs cialis levitra prices ciprofloxacin coverage cialis 5 mg is lexapro a controlled substance finasteride efectos secundarios azithromycin for pneumonia azithromycin when will cialis go generic cialis samples tamoxifen side effects in women over 55 cialis 10 mg side effects of lexapro 10 mg azithromycin for strep throat cialis effects cheap viagra what is cipro usually prescribed for how long does viagra last ciprofloxacin 500 mg tamoxifen interaction viagra costs tamoxifen lawsuits viagra coupon viagra coupons acyclovir 800mg generic for cialis cialis for daily use viagra generic finasteride results azithromycin side effects how much does cialis cost viagra wikipedia 9 levitra at walmart liquid cialis cialis coupons azithromycin without a doctor’s prescription what is ciprofloxacin prescribed for cipro antibiotics weaning off lexapro canada viagra how to wean off lexapro without withdrawals natural viagra how does cialis work ciprofloxacin dose lexapro medication viagra on line no prec viagra alternative side effects of azithromycin 250 mg cheap cialis viagra online cialis canada lexapro and weight gain what does ciprofloxacin 500mg treat ciprofloxacin ophthalmic solution tamoxifen langzeitfolgen viagra pills azithromycin cost levitra vs viagra what does azithromycin treat finasteride long term effects lexapro vs wellbutrin cialis 20mg directions viagra single packs side effects of viagra viagra vs cialis vs levitra finasteride 5mg side effects mayo clinic ciprofloxacin hydrochloride ophthalmic side effects of lexapro viagra receptfritt viagra sex cialis free trial acyclovir medication ciprofloxacin 500 finasteride medication azithromycin 500 mg finasteride effets secondaires common side effects of ciprofloxacin 500 mg is azithromycin penicillin acyclovir 400 mg viagra prices tamoxifen citrate viagra on line cialis 20mg viagra wiki escitalopram 20 mg ciprofloxacin 500mg antibiotics side effects viagra side effects tamoxifen nebenwirkungen levitra dosage ciprofloxacin class acyclovir 800 mg how to use viagra 200 cialis coupon finasteride 5mg side effects cialis side effects cialis dosage strengths levitra without a doctor prescription how does lexapro work lexapro 10 mg ciprofloxacin nebenwirkungen viagra cost azithromycin vs erythromycin azithromycin uses celexa vs lexapro cialis reviews viagra 100mg cost of cialis cialis 30 day sample ciprofloxacin 250mg azithromycin 500mg azithromycin and alcohol finasteride vs dutasteride how to wean off lexapro side effects of ciprofloxacin 500 mg cipro drug class how long for azithromycin to take effect ciprofloxacin spc azithromycin pregnancy antibiotic ciprofloxacin azithromycin 250mg escitalopram effets secondaires what infections does ciprofloxacin treat levitra 20 mg viagra pillen kruidvat zithromax dosage viagra kaufen cipro uses zoloft vs lexapro zovirax free viagra zovirax cream lexapro side effects in men viagra uk levitra erfahrungen cialis coupons from manufacturer viagra tablets stopping lexapro ciprofloxacin 250 mg viagra vs cialis vs levitra side effects of acyclovir levitra 20mg acyclovir 200mg cialis 5mg daily cost of viagra ciprofloxacin hydrochloride cialas viagra activate thuoc azithromycin women viagra ciprofloxacin hcl cialis vs viagra viagra for men ciprofloxacin 500mg antibiotics revatio vs viagra cialis otc cialis price acyclovir lexapro manufacturer website what is tamoxifen cialis medication levitra tamoxifen and bone pain what does ciprofloxacin treat viagra ohne rezept auf rechnung buy generic levitra lexapro generic buy viagra