House Financial Services Chairman Barney Frank, D-Mass., and Domestic and International Monetary Policy Subcommittee Chairman Luis Gutierrez, D-Ill., are sponsors of the bill that would give authority to the Treasury Department to change the composition of coins issued by the U.S. Mint to less expensive materials.
The two estimate that by changing the composition of the penny and nickel, the federal government could save more than $100 million annually. Another $300 million could be saved if similar changes were made to the half-dollar, quarter and dime.
"The financial resources of the federal government are limited, and it is rare when we have the opportunity to make a simple legislative fix with the potential to save the taxpayers so much. We should take full advantage of this opportunity and pass this legislation in an expeditious manner," Gutierrez said.
The rise in the cost of metals has contributed greatly to coin costs. Since March 2003, the price of copper and nickel has increased 300 percent and the cost of zinc has grown by 450 percent. Pennies consist mostly of zinc with a copper-plated surface. Nickels are made of an alloy of 75 percent copper and 25 percent nickel.
Frank's staff said it costs the government 1.7 cents to make a penny and 10 cents to make a nickel.
The measure would require a public comment period before bidding to hear on alternative compositions of the coins. The bidding process on materials would be competitive and Gutierrez said his panel would have tough oversight of the process.