The Penny Costs More Than 3 Cents to Make, Resulting in “Over $179 Million” in Taxpayer Costs Through 2023

The Department of Government Efficiency may soon set its sights on the United States currency, possibly looking to eliminate the penny

The United States currency may soon be under scrutiny by the Department of Government Efficiency (DOGE), with a potential focus on eliminating the penny, recent social posts suggest.

In a post on X on Tuesday, DOGE highlighted that the penny costs more than three pennies to make, leading to “over $179 million” in taxpayer costs through 2023.

Data from the US Mint shows that pennies accounted for over half of the 5.9 billion circulating coin shipments from the Federal Reserve in 2024. The cost of pennies has also risen to 3.69 cents, with the coin consistently “remaining above face value” over the last two decades.

Around 3.23 billion pennies were minted in 2024, according to the US Mint, compared to 4.52 billion in 2023.

As DOGE is tasked to look into several aspects of government spending, the question of continuing to produce coins that have seen less use in recent years is now up for discussion.

But how valid are the department’s concerns about cash?

According to the Federal Reserve’s Diary of Consumer Payments Choice report, cash was the third-most-used payment method in 2024, “though its share of all payments declined as the total number of payments increased.”

However, cash payments among Americans remained stable, with an average of seven payments per month made in cash by each person.

The demographic that used cash the most included low-income households and individuals aged 55 and older. In-person shopping was also a key driver of cash usage.

Dropping the creation of the penny wouldn’t be an entirely new concept, as several other countries have taken similar actions in recent years.

Canada stopped making its pennies in the early 2010s for the same reasons that the US might part ways with the coin.

With the penny out of circulation, purchases in Canada are rounded to the nearest nickel. For instance, if something costs $20.02, it will be rounded down to $20. On the other hand, if something costs $20.03, it will be rounded up to $20.05.

The Federal Reserve has also addressed this topic in recent years, stating in a 2022 report that “drastically reducing or ending the production of the penny” could lead to a “significant flow back of coin from consumers and businesses seeking to turn in their pennies.”

The report also suggested that reducing the production of the penny could save the Mint about $100 million annually.

Despite the concerns, deciding to eliminate the penny wouldn’t be as simple as Musk asking President Trump to do so, as the Constitution gives powers to regulate the Federal Reserve to Congress.

While Republicans do have control in Congress, DOGE is already facing legal troubles, with lawsuits filed challenging Trump’s ability to create the entity, which is separate from the US government but serves as an auditor.