HR-3074-119
Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
Sponsored by Lisa McClain (R-MI)
What it does
This bill would direct the Secretary of the Treasury to stop minting pennies for general circulation, while allowing existing pennies to remain legal tender and permitting continued production for collectors. It would allow — but not require — businesses and individuals to round cash transactions to the nearest five cents (up or down depending on the final digit), with specific protections ensuring rounding always favors the customer when the business chooses to round. Electronic, card, and check payments would not be subject to rounding. The bill also requires the Federal Reserve and Treasury to report on the transition's impact on coin distribution and on low-income, unbanked, and underbanked communities.
Who benefits
The U.S. Mint and federal government, which currently spends more than one cent to produce each penny, potentially saving tens of millions of dollars annually. Retailers and businesses that handle large volumes of cash, who would spend less time counting and managing pennies. Consumers who would spend less time handling pennies in transactions. The nickel industry, as the bill also allows the Treasury to modify the composition of the five-cent coin to reduce its production cost. Coin collectors, who could still purchase pennies as numismatic items.
Who is hurt
Low-income, unbanked, and underbanked individuals who rely heavily on cash transactions and could be systematically rounded up on purchases over time, even if individual rounding amounts are small. Penny-dependent charitable giving programs (e.g., "take a penny" trays, coin drives). Zinc producers and suppliers, since pennies are currently 97.5% zinc; ending production would reduce demand for that metal. Workers paid in cash whose employers might round wages down (though the bill requires employers to round up). Businesses that would need to update point-of-sale systems and train staff on rounding rules.
Supporters argue
Supporters argue that the penny costs the U.S. Mint approximately 3.7 cents to produce — meaning the government loses money on every penny made — and that eliminating it would save an estimated $85 million or more annually based on recent Mint reports. They contend that rounding is a proven, low-disruption practice already used in Canada, Australia, New Zealand, and several European countries without measurable harm to consumers, and that the bill's built-in consumer protections and mandatory impact assessments for vulnerable populations make it a fiscally responsible and carefully managed transition.
Opponents argue
Opponents argue that rounding, even when nominally optional, creates a structural disadvantage for cash-dependent consumers — disproportionately low-income individuals — who cannot opt into card or electronic payments to avoid rounding. They contend that while individual rounding amounts are small, the cumulative effect across thousands of annual transactions could represent a meaningful hidden cost to the most economically vulnerable Americans, and that the bill's impact assessment comes after, not before, the penny's elimination, leaving Congress without the data needed to make an informed decision before the change takes effect.
Constitutional context
Congress has explicit authority under Article I, Section 8 to coin money and regulate its value, making this bill squarely within enumerated powers with no significant constitutional tension. The bill's preemption of state and tribal law on cash rounding (Section 4) is a standard exercise of the Supremacy Clause, though it could face narrow challenges if states argue it conflicts with their consumer protection frameworks.
Checks and balances
Congress gains direct authority over coin production by mandating the Treasury Secretary cease penny minting; the Federal Reserve is required to report to congressional committees, preserving legislative oversight of the transition.
Historical precedent
The United States previously eliminated the half-cent coin in 1857, a decision that was similarly debated on cost-efficiency grounds and ultimately had minimal disruption to commerce; Canada eliminated its penny in 2013 and implemented a nearly identical rounding system that remains in use today.