Summary#
This bill would stop the U.S. Mint from making ordinary one-cent coins (pennies) and require cash payments to be rounded to the nearest five cents. The goal is to remove everyday use of the penny while keeping pennies legal tender and allowing limited coin production for collectors. Rounding rules would apply only to cash payments and cash wages; electronic and non-cash payments would not be rounded.
- Main change: The Treasury must stop producing circulation pennies within one year of enactment, except for limited collector coins that must be sold at no net loss.
- Main change: Cash transactions and cash wages would be rounded to the nearest five cents under specified rules; this rounding starts one year after enactment.
- Keeps legal tender: Existing pennies would remain legal tender for all debts and payments.
- Non-cash exempt: Rounding does not apply to card payments, electronic transfers, checks, gift cards, money orders, or similar non-cash methods.
What it means for you#
- Consumers who pay with cash: Small cash purchases would be rounded to the nearest five cents. For example, a total ending in 3, 4, 8, or 9 cents would be rounded up; a total ending in 1, 2, 6, or 7 cents would be rounded down. Totals of $0.01 or $0.02 would be rounded up to $0.05.
- Businesses that accept cash: Cash sales and cash payouts must follow the rounding rules. Businesses would need to apply the rounded amount when a customer pays with coins and cash.
- People paid in cash (cash wages): Employers paying wages in cash must round those payments according to the same rules. The bill does not explain how to handle repeated or split pay periods.
- Card and electronic users: Debit, credit, electronic transfers, checks, gift cards, and similar payments are not rounded and are unchanged.
- Coin collectors: The Mint may still make special pennies for collectors. Those coins must be sold and priced so their sales cover production costs and an appropriate share of fixed costs.
- Government (Treasury): The Mint must stop routine penny production and can produce collector pennies under specified conditions.
Expenses#
No publicly available information.
- The bill requires collector pennies to be sold so net receipts at least cover production costs and a share of fixed costs, but it provides no cost estimates for stopping regular penny production or for transition work.
- The bill does not include a fiscal note in the supplied material. It does not provide estimates for effects on Treasury revenue, mint operating costs, or costs to businesses to change cash-handling systems.
Proponents' View#
- The bill appears intended to stop the government from spending money to make a coin that is rarely used in daily transactions.
- A possible argument for the bill is that rounding small cash payments simplifies cash handling and reduces the need for pennies in circulation.
- Allowing collector coins and requiring they be sold at no net loss appears intended to protect taxpayers from subsidizing special-issue pennies.
Opponents' View#
- One concern is that rounding could shift tiny amounts from buyers to sellers over many transactions; the bill does not show how net effects on consumers would be tracked or offset.
- The bill does not clearly explain how cash-wage rounding will be handled across pay periods, or how employers should report and record rounded wages for labor and tax rules.
- It is unclear how businesses, especially small retailers, should update registers and receipts to show rounded totals and how to handle mixed payments (part cash, part card).
- The supplied material does not include an estimate of fiscal impacts on the Mint, Treasury revenue from coin seigniorage, or compliance costs for businesses and payroll systems.