Mint and Public Boo Dollar-Coin Proposals
REMEMBER the Susan B. Anthony dollar coin? You may not, but the United States Mint certainly does: It stores 280 million of the failed 1979 dollar coins in its vaults and says it doesn't have room to store another dollar-coin failure.
The Senate Banking Committee heard debate on yet another dollar-coin proposal earlier this month, the ninth such effort in about a decade to introduce a dollar coin. The coin would be more convenient, more easily used by people with visual disabilities, and would bring the United States up to speed with other industrialized countries, says Sen. Rodney Grams (R) of Minnesota, sponsor of the legislation.
But the US Mint claims Americans simply do not want a dollar coin. The Mint points to polls taken by USA Today, the National Consumer League, and several other organizations that indicate about 75 percent of Americans reject the coin idea. The Treasury Department also opposes the bill, although it is unclear whether Secretary Robert Rubin would recommend a veto of it.
Nonetheless, the bipartisan push for dollar coins is seen as the most serious in recent years. Edward Kelly, a member of the Federal Reserve's Board of Governors, discounts public opinion polls, noting that Canadians have warmed up to the idea of a dollar coin in a similar change.
BOTH House and Senate bills call for replacing dollar bills with coins, thereby forcing Americans to accept the new dollar. The new gold-colored coin would be of a different size so it could be better distinguished from other coins and hopefully avert the disaster of the quarter-sized Susan B. Anthony. The coin would be more durable than bills, staying in circulation 20 times longer than a dollar bill. This could save the government $395 million per year over 30 years, according to a General Accounting Office report.
The Mint also balks at Congress's timeline for introduction - it claims it needs at least 36 months instead of 18 - and says it believes the coin would be doomed, as it would have much higher production costs than the Susan B. Anthony. In the first 18 months, 4 billion dollar coins would be produced, with another 2 billion to 5 billion added later.
''We have a horrendous capacity problem just keeping up with things just as they are,'' says Mint spokesman Donald Nichols. The usual demand for coins is more than 19 billion per year, and combined with an ambitious Olympic commemorative coin series and work-force reductions, Mint resources would be stretched extremely thin.
Because the coin would completely replace dollar bills, it could cause a run on quarters and $2 bills, says Philip Diehl, Mint director. In addition, he says, the government ''should be investing in new technology,'' such as ''electronic cash,'' instead of old technology.