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The Treasury Department has ordered its last delivery of blank pennies. Once that's exhausted, the federal government will stop minting the one-cent coins, which each cost nearly four cents to produce. Saul Loeb/AFP hide caption
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Saul Loeb/AFP
The Trump administration hopes to save big bucks by phasing out the penny.
The Treasury Department has placed its last order for blank pennies and plans to stop minting the one-cent coins as soon as that's exhausted.
Each penny costs nearly four cents to produce, so the move is expected to result in immediate savings of $56 million a year. A Treasury spokeswoman confirmed the decision, which was first reported by the Wall Street Journal.
President Trump called for the phase-out back in February. Canada, New Zealand and Australia have also eliminated their one-cent coins.
Pennies will remain legal tender, which is fortunate since more than a billion dollar's worth are in circulation. Most are rarely used, however, instead gathering dust in dresser-top coffee cans and forgotten pants pockets.
The phase-out may require stores to round prices up or down to the nearest nickel, although the growing popularity of non-cash payments makes that less of a headache. Less than one in five payments are made with cash, according to the Federal Reserve Bank of Boston.
Rep. John Rose, R-Tenn., suggested during a hearing this month that phasing out the penny could increase demand for nickels. Minting nickels is also a money-loser for the government, since the five-cent coins cost about 14 cents each.
Treasury Secretary Scott Bessent told lawmakers that the administration believes it can break even on nickel production by changing the composition of the coins.
"I will point out that the dime is very profitable," the secretary added.
