The bill reads as follows:
S 1385 IS
Mr. VITTER (for himself and Mr. DEMINT) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs
A BILL
To terminate the $1 presidential coin program.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. TERMINATION OF PRESIDENTIAL $1 COIN PROGRAM.
Section 5112 of title 31 United States Code, is amended by striking subsection (n) and inserting the following:
`(n) [Reserved.]'.
112th CONGRESS
1st Session
S. 1385
To terminate the $1 presidential coin program.1st Session
S. 1385
IN THE SENATE OF THE UNITED STATES
July 19, 2011
July 19, 2011
Mr. VITTER (for himself and Mr. DEMINT) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs
A BILL
To terminate the $1 presidential coin program.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. TERMINATION OF PRESIDENTIAL $1 COIN PROGRAM.
Section 5112 of title 31 United States Code, is amended by striking subsection (n) and inserting the following:
`(n) [Reserved.]'.
This is clearly an over reaction to the slanted report by NPR that suggests this is a taxpayer issue and not an issue of the broken monetary system in the United States. Rather than figure if this bill will properly achieve their purpose, Messrs. Vitter and DeMint wrote the most expedient bill regardless of its ramifications.
First, if this bill is passed, it will not do anything to relieve the oversupply of dollars being held by the Federal Reserve. All it will do is not increase the current supply leaving about $1 billion of coins in the Fed’s coin vaults and not circulating in the economy.
Another problem with the bill is that it leaves the First Spouse Gold Coin program in place. A closer look at the law shows that the First Spouse Program is codified in 31 U.S.C. § 5112(p). In order to stop the entire program, the bill would have to remove both subsections “n” and “p.”
Further, 31 U.S.C. § 5112(q) (subsection “q”) requires the U.S. Mint to promote the Presidential Dollar program and includes the requirements about the government and commercial acceptance of the coins. If the bill passes by removing subsection “n,” both the U.S. Mint and Federal Reserve will have difficulty complying with this law.
For numismatists who have been collecting Presidential Dollars, this bill’s passage will end the program early leaving us with a partial series. Teachers who use the coins and the good materials produced by the U.S. Mint to help teach history will have to find different tangible aids than coins. Coins would be a better teaching aid since it is tangible and money gets everyone’s attention.
The ONLY way to reduce the oversupply of dollars being held in the Federal Reserve coin vaults is to eliminate the $1 Federal Reserve Note. With out the paper, coins become the currency of the realm and will start to circulate.
I am sure that within a day someone will send a comment saying that Americans like paper and do not like coins. While there are segments of the population that will complain, Americans are resilient and will adapt. We can adapt to anything that the government can do and be successful. We can adapt to anything that market forces place on us and bees successful. We went from an all cash society to adding credit cards; cell phones are now everywhere as compared to 10 years ago; we have survived many changes in the economy; we went from leaded gas to unleaded; transit tokens to electronic metro passes; and now many cities are moving to paying for parking electronically rather than feeding quarters into meters. Americans adapt to change all of the time. Now it is time for all Americans to dig into their souls and change their currency habits for the good of the country.
14 comments:
As an avid coin collector, I love the Presidential Dollar Coin Series. I ask for them and use them frequently. However, I wouldn't want to see the $1.00 FRN discontinued. The FRN is simply much more practical to store & use in everyday commerce. I've bought the dollar coins thru the Mint's Direct Ship Program and circulated them here locally, but there is clearly a reluctance to accept them due to storage and weight issues. I'd like to see the US MINT revamp & continue the Presidential Coin Series, reduce mintages drastically, and make them a collector's item. There is a place for them in America, but they'll never be as convenient or widely accepted as the Washington RRN
Sure tell the vending machine lobby they need to pay millions (billions) to update there vending machines. That is the real hold up.
Anon:
Aside from being a stimulus program, most vending machines made after 2000 as capable of taking the one dollar coins. The mechanisms being sold today will take all US coins. Accepting dollar coins in vending machines will not be a hold up in the decision.
Scott,
I like the first spouse program a lot and have spent a lot to build a full set. There is absolutely no reason to end that series though I think quarter ounce coins would have been better because the price of gold is making the coins too expensive for most people. Sounds like you disagree with people who say these bills would end the spouse program, but you see that as a problem for some reason. Are you against the spouse coins? Please explain. Also, I would stress that we are a long, long way from anything happening. First, the geniuses on the Hill need to understand no taxpayer money is involved, and second they need to be made aware that there is a spouse coin program which should not be ended. Finally, as I understand, these bills only seek to stop the presidential program, not the Native American dollars, which I love. If those were available from banks, they might circulate to a better degree because they are attractive coins. The art on the presidential dollars is very weak. Look at what other countries do like the 2 euros, which are nice coins.
Dollar coins are no worse to carry in your pocket, IMHO, than quarters. They are eccensially the same size and weight and you don't see people crying and moaning about using quarters in daily commerce.
People just tend to resist *change* (no pun intended) and will adapt use dollar coins, just as Canadians did, when the dollar note was withdrawn from circulation.
I, for one, would prefer to carry dollar coins because they are so useful for vending machine purchases, tolls, etc. and would actually reduce the weight of coinage in my pocket by replacing the multiple quarters I otherwise must carry to buy everyday items like bottles of Coke. I mean - why have to cary 3 or 4 quarters around for that kind of purchase when you can just carry a single dollar coin? Yeah, I know, a lot of vending machines take paper money, but have you ever struggled to get one of them to take a well-worn dollar bill? It's a real pain in the butt! There would be no such problem with dollar coins - just drop 'em in - make your selection and you're done.
Get rid of the dollar bill!
You people need to get over yourselves - put it to a vote and the public does not want or need dollar coins!
Just because coin collectors want coins doesn't mean the rest of us need to suffer.
If it's dollar coins versus dollar bills... bye bye dollar coins.
There appears to be some errata in the references to the Codification.
31 USC 5112(n) establishes the $1 Presidential Coins.
31 USC 5112(o) establishes the First Spouse Bullion Coin Program.
31 USC 5112(p) establishes the need to deal with barriers to distribution of $1 coins.
31 USC 5112(q) establishes the American Buffalo Gold Bullion Coin program, and would not be impacted by any of the currently proposed changes.
Given the Code in its current form, and the proposed legislation as drafted, if "(n)" is stricken and/or replaced with "(n) [Reserved]," I believe the Spouse program will be lost as a direct consequence, as 5112(o)(5) "Issuance of coins commemorating first spouses" should take precedence; e.g., "The FS coins shall be issued on the same schedule as the $1 Coins." No $1 Presidential Coins, then no schedule and no FS Bullion Coins.
Although 5112(p) makes 2-3 references to the $1 Presidential Coins, the section emphasizes "increasing awareness and use of $1 coins (genericly), which could be accomplished through the use of the existing hoard of $1 Presidential Coins and the continued production of the Native American Dollar Coins.
Bottom line - both forms of the proposed legislation are knee-jerk reactions that will not solve the much bigger problems within our monetary system.
Politicians need not be collectors. This legislation would cause such chaos in the coin communities. Simply LIMIT the number of Presidential Dollars produced each year - and complete the series. Ditto Sacagawea, if necessary. Overstock in the vaults? Destroy most or all... *POOF* ...no problem. The U.S. Government has been destroying coins and paper money since its inception; why balk at an established balancing act now? Someone with some numismatic acumen should be assigned to this case.
While I would prefer the Fed or Congress to mandate a deflationary policy to restore the value of our money, I know that's not gonna happen so we have to realistic here.
The quarter has the purchasing power a cent had about 100 years ago which suggests that all coins below the quarter need to be discontinued as their purchasing power is insignificant. I would go even further to suggest that all paper currency below the $20 bill ought to be eliminated too and replaced with coins of the same value (though I'd prefer a $2½ coin over a $2 for tradition's sake) in order to have coins that better reflect the purchasing power this nation once expected them to have.
The common complaint of heavy pockets under this scenario I think would be relatively moot as it would be too expensive to carry around many coins of such high value and it would also be too expensive to hoard them in jars so they'd get spent and circulate heavily unlike coins now.
Bottom line is our country is in severe economic distress. We must eliminate government waste in all it's forms. Making coins very few people want and storing them in warehouses at taxpayer expense is insane. Make enough to satisfy the collectors. Let them order directly from the mint and make a profit by charging them a premium because of the low production runs, shipping & handling and cut out the excess production.
Jim English
Drop the dollar bill. Drop the penny. Our national debt is too large to hang on to outdated relics. People will start to use the dollar coins and the Fed won't have to pay $3 million to ship the uncirculated coins to a new storage facility.
Let me try to address several posted points in one response.
First, what is insane is that the US is the only major country that didn't eliminate its lowest-denomination bill years ago. Almost every estimate I've seen has concluded that continued use of $1 bills costs $600 million to $1 billion a YEAR in waste and inefficiency, which is one heck of a lot more than what's being paid to store those ostensibly unwanted coins.
Second, destroying existing $1 coins will cost far more than their original production "price". That's only about a dime, but once minted the coins are monetized at their full face value, so destroying them would be equivalent to writing off ten times what it cost to mint them.
Third, I find the "Americans can't adapt" argument to be either insulting or a sad indictment. Geez, if 500 million Europeans plus how many Canadians, British, Kiwis, and so on can all adapt to coins without the planet exploding, it either means the US population a lot denser than the rest of the world - or that just maybe the naysayers have it all wrong. If people are so attached to low-denomination notes, the BEP can redesign the $2 and crank up production. The 2 can go in every cash register's former $1 slot, nobody will ever get more than one $1 coin in change, but the country can at least save half the costs of printing billions of $1 notes every year.
I say we should eliminate the $1 bill and issue the $1 denomination as coins only. We should also discontinue the $2 bill and start issuing a $2 coin. We also should start issuing a $500 bill. Inflation has made the current denomination structure obsolete. I know that the public is resistant to change, but 3 years ago we got through the forced switch to digital television ok. I think that the public would find an update to our currency denomination structure to be easier to adapt to than the tv switchover was.
It costs 18 cents to produce each President coin, they sell it to banks at face value- an 82% profit. Sell 100 Million coins- profit of $82 Million dollars. So....
Each year take 100 Million "old President Coins" from the vault and restrike them into new coins. At a cost of 18 cents (origional cost) plus approx 18 cents (new strike cost) minus raw material costs (material already paid for), the total cost of the new coins would be about 35-40 cents per coin. Selling each for 1 dollar would still net a profit of about 60%. And it would eliminate the stockpiled coins at a rate that would last for 15 years( with no need to purchase new material). The decision to eliminate the Presidential Dollar Program is probably based on the fact that:
PRESIDENTS WILL NOT BE HONORED WITH A COIN IF THEY ARE ALIVE AT THEIR COIN MINTING DATE. President Obama will most likely still be alive in 5-6 years when his time to be on a Presidential Dollar Coin arrives. The fact that he would be skipped and not honored probably made his ego decide that if he was not to be honored, no other President should be honored.
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