Elon Musk's Department of Government Efficiency (DOGE) Eyes Ways to Slash Government Spending, Penny Could Be First Target

DOGE, which officially became a part of the government on Tuesday after President Donald Trump signed an executive order, posted on X that producing the penny is costing American taxpayers tens of millions of dollars, suggesting that it may be one of the items it may consider eliminating.

The Department of Government Efficiency (DOGE), headed by Elon Musk, is exploring ways to reduce government spending. One potential target is the penny.

DOGE, which became an official part of the government on Tuesday after President Donald Trump signed an executive order, posted on X that producing the penny is costing American taxpayers tens of millions of dollars. This suggests that the penny may be one of the items that DOGE considers eliminating.

Musk's initiative, which aims to cut $2 trillion in federal spending, does not directly state that the penny will be eliminated. However, it highlights that the cost of producing the penny is three times higher than its actual value.

According to the U.S. Mint, each penny cost 3.69 cents to produce in fiscal year 2024, costing taxpayers $119 million. This marks the 19th consecutive year in which the production cost of the penny exceeded its face value.

The penny was one of the first coins produced by the U.S. Mint after its establishment in 1792. When it was first introduced, the penny was larger and made entirely of copper. Today's smaller penny is primarily composed of zinc, according to the U.S. Mint.

For comparison, the Canadian government removed the penny from its coinage system in 2012 due to inflation eroding its purchasing power.

“The penny's burden to the economy has increased over time in relation to its value as a payment method,” the government's 2012 Economic Action Plan stated.

The penny had only retained about one-twentieth of its original purchasing power at the time.

“Some Canadians now consider the penny to be more of an annoyance than a useful coin due to its decreasing purchasing value,” the report noted.

According to the U.S. Mint, each penny cost 3.69 cents to produce in fiscal year 2024, costing taxpayers $119 million. (Tim Boyle/Getty Images) / Getty Images)

The penny is just one of many items that DOGE may consider eliminating as it aims to cut $2 trillion in federal spending. However, Musk stated in early January that DOGE may not reach its intended $2 trillion target.

“I think we'll try for $2 trillion. I think that's like the best-case outcome,” Musk told Stagwell Inc. CEO Mark Penn, adding that he believes if DOGE aims for $2 trillion in cuts, it has a “good shot at getting $1 [trillion].”