In a significant move aimed at reducing government expenditures, President Donald Trump announced on Sunday that he has directed the U.S. Treasury to cease minting new pennies. In a post made on his Truth Social account, Trump declared, “For far too long the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful! Let’s rip the waste out of our great nation’s budget, even if it’s a penny at a time.” Such a directive follows ongoing discussions regarding the utility and financial viability of the penny, which has been marked by its increasing production costs.

The U.S. Mint reported that the production cost of a single penny has risen to approximately 3.7 cents, marking the 19th consecutive year that it has cost more than its face value. In fiscal year 2024, the Mint incurred losses of $85.3 million on nearly 3.2 billion pennies produced, emphasizing the financial drain on taxpayers. Critics point to this expense as just one reason to eliminate the coin. Supporters of retaining the penny argue that its absence could lead to higher transactions costs if prices are rounded up at cash registers.

Elon Musk, currently leading the Department of Government Efficiency (DOGE), previously highlighted in a post that producing pennies cost taxpayers over $179 million in fiscal year 2023. Discussions surrounding the discontinuation of the penny are not novel; numerous proposals in Congress over the years have sought to address the matter, none advancing to become law.

Although Trump claims the authority to stop minting the penny, legal scholars suggest that the situation remains ambiguous. U.S. law enables the Treasury Secretary to mint coins as necessary, yet Congress retains oversight over currency specifications including size and composition. Historically, substantial opposition has come from various stakeholders, including the zinc producers who provide materials for pennies.

Former President Barack Obama had previously voiced support for phasing out the penny, and similar initiatives have been successful in other countries like Canada, which eliminated its penny from circulation in 2012. Observers note that Americans may not miss the penny, as its use diminishes in an increasingly cashless society.

Should the Trump administration's focus on budget cuts persist, actions concerning currency reform could continue to gain traction, potentially changing the landscape of U.S. coinage. The immediate future of the penny remains uncertain as legal and political discussions unfold regarding its production.

For further details, visit the CBS News article.