Sen. David Vitter, R-La., on Wednesday, introduced a bill (S.1385) to repeal the law and save taxpayers money just as the U.S. Mint is rolling out the edition of the coins honoring the 18th president, Ulysses S. Grant.
"Even though many in Congress, including myself, hoped that dollar coins would eventually save taxpayers money, it's turned out to be one of those unnecessary and, quite frankly, wasteful programs that we should eliminate," Vitter said. "Banks and credit unions are increasingly returning the dollar coins to the Federal Reserve because people don't want them and aren't using them. So the most sensible thing to do is for Congress to quit spending taxpayer dollars producing and storing the unwanted coins."
Some 1.252 billion presidential $1 coins are currently sitting in plastic bags or boxes on shelves in vaults in Philadelphia and Baltimore, according to the Federal Reserve. A Government Accountability Office report dealing with the broader issue of paper-versus-metal dollars projected that the total in presidential coins will soon exceed 2 billion.
The cost of making the coins -- about 32 cents each, or $576,000 per day -- is only part of the story because the government is running out of space to store them. The Federal Reserve Bank of Dallas is preparing to build a new storage vault at a cost of $650,000, to which must be added $3 million to move the coins south in armored trucks and $1.4 million for new pallets and building renovations, according to a press release from Vitter.
The 2005 law and a similar 2007 law on coins honoring Native Americans require the Mint to identify and overcome barriers to wider circulation of the coins. To promote their use, the Mint recently partnered with Walt Disney Resorts, Whole Foods in North Carolina, and Army and Air Force Exchange Service stores at four military bases, according to a December 2010 Treasury Department Inspector General's audit.
The Federal Reserve, however, is less than hopeful. In a June 2010 report, analysts wrote that "for previous $1 coin programs, the Reserve Banks encountered large excess inventories for much longer periods because demand was very low.
"The Presidential $1 Coin Program experience is consistent with those other $1 coin programs," the report said. "Dollar coin payments to circulation increased significantly in the first year of the program, but have consistently declined since that time . . . We have no reason to expect demand to improve."
Vitter has a co-sponsor in Jim DeMint, R-S.C., and one of the 2005 bill's sponsors, Sen. Jack Reed, D-R.I., told ABC News on July 14 that he believes Congress should consider ending production of the coins.
Former Rep. Earl Pomeroy, D-N.D., who lost his reelection bid last November, was an original sponsor of both the bill for the presidential coins and a later coin honoring Sacagawea, a Native American interpreter on the Lewis and Clark Expedition. But Pomeroy told NPR in June that it is foolish to assume that "with no one picking up these coins, we've got to keep printing them because we've got to get through the rest of the presidents list.
"Is the nation waiting with bated breath for us to get to the Calvin Coolidge coin?" he asked. "Maybe we should call a halt to this whole thing."