S-1525-119
Held at the desk.
Sponsored by Cynthia Lummis (R-WY)
What it does
This bill would direct the Secretary of the Treasury to stop minting pennies for general circulation, while allowing pennies to continue being produced as collectible numismatic items. Existing pennies would remain legal tender. For cash-only transactions, the bill would permit — but not require — sellers and buyers to round the total to the nearest 5 cents, following a specific rounding schedule (amounts ending in 1, 2, 6, or 7 cents round down; amounts ending in 3, 4, 8, or 9 cents round up). The rounding rules would not apply to electronic, card, or check payments. The bill would also require the Federal Reserve and Treasury to report on the transition's effects, particularly on low-income, unbanked, and underbanked individuals, and would establish a formal congressional notification process before any future coin denomination could be discontinued.
Who benefits
The U.S. Mint and federal government, which currently spends approximately 3 cents to produce each penny, generating a net loss. Retailers and businesses that handle large volumes of cash, who would spend less time and labor managing penny inventory. Coin-counting and cash-handling equipment operators who would process fewer coin types. Nickel coin collectors and the numismatic market, which would see continued penny production for collectibles. Consumers who find penny transactions inconvenient. Countries that have already eliminated low-denomination coins (Canada, Australia, New Zealand) offer models suggesting minimal disruption to most consumers.
Who is hurt
Low-income, unbanked, and underbanked consumers who rely heavily on cash transactions and could systematically lose small amounts through rounding. Penny-roll savers and individuals who accumulate pennies as a savings habit. Charities that rely on penny donation drives (e.g., "penny wars" fundraisers). Businesses with prices ending in amounts that would consistently round up, potentially affecting price competitiveness. Zinc producers and suppliers, since pennies are 97.5% zinc — the U.S. Mint is one of the largest domestic zinc consumers. Workers paid in cash whose wages, if not divisible by 5 cents, must be rounded up by employers (a protection in the bill, but one that adds a compliance burden on small employers).
Supporters argue
Supporters argue that the penny costs the federal government more to produce than it is worth — approximately 3 cents per coin as of recent U.S. Mint reports — resulting in tens of millions of dollars in annual losses. They contend that Canada eliminated its penny in 2013 with no measurable harm to consumers or price levels, and that rounding averaged out to be neutral over many transactions. Supporters also argue that pennies are largely removed from circulation immediately upon receipt, hoarded, or discarded, making them economically inefficient and environmentally costly to produce from raw materials.
Opponents argue
Opponents argue that rounding, even when mathematically neutral on average, could disproportionately harm low-income and cash-dependent consumers who make many small, individual transactions — each of which could round against them. They contend that the bill's consumer protections are permissive rather than mandatory, meaning businesses retain discretion to round in ways that favor themselves. Opponents also argue that eliminating the penny could allow retailers to reprice goods to exploit rounding thresholds, and that the burden falls unevenly on the roughly 5–6% of Americans who are unbanked and conduct most or all transactions in cash.
Constitutional context
Congress has clear authority over coinage under Article I, Section 8, which grants it the power to "coin money" and "regulate the value thereof." No significant constitutional challenge is anticipated, as this bill directly exercises an enumerated power rather than delegating broad rulemaking authority to an agency. The reporting requirements placed on the Federal Reserve and Treasury are administrative in nature and do not raise major questions doctrine concerns under West Virginia v. EPA (2022) or post-Loper Bright scrutiny.
Checks and balances
Congress gains direct control over coin discontinuation by requiring the Secretary of the Treasury to notify and brief the relevant congressional committees at least 60 days before discontinuing any circulating coin, reducing executive branch unilateral authority over currency composition.
Historical precedent
Canada eliminated its one-cent coin in 2013 under the Currency Act, adopting a nearly identical rounding system for cash transactions, with subsequent studies finding no statistically significant impact on consumer price levels.