Elon Musk and the newly created Department of Government Efficiency (DOGE) are zeroing in on the cost of producing the penny and its $179 million impact on taxpayers.
Aiming to slash $2 trillion from the overall federal budget, DOGE and Musk have set their sights on reducing the costs of managing the U.S. Mint, with the penny at the forefront of potential cuts.
Launched just days after President Donald Trump signed the official executive order to establish DOGE, the department published a post to X, highlighting how the penny’s production is a financial drain on taxpayers, currently costing more to make than it’s worth.
The penny costs over 3 cents to make and cost US taxpayers over $179 million in FY2023.
The Mint produced over 4.5 billion pennies in FY2023, around 40% of the 11.4 billion coins for circulation produced.
Penny (or 3 cents!) for your thoughts.
Sources:https://t.co/Y5LlrpyA62…
— Department of Government Efficiency (@DOGE) January 22, 2025
A report from the U.S. Mint reveals that in 2024, it cost taxpayers 3.69 cents to produce a single penny, and that nickel now costs 11.5 cents to manufacture. This marks the 19th consecutive year in which the Mint spent more to produce the penny than it was able to recover.
Canada, facing similar concerns about the penny’s dropping purchasing power, discontinued its coin in 2012, citing the rising cost of production and its declining use. The Canadian government’s Economic Action Plan of 2012 said that the penny had become more of a nuisance than a useful form of currency, reporting that it retained only one-twentieth of its original purchasing power.
The penny, first minted by the U.S. in 1793, was originally crafted from pure copper and had a much larger size than today’s version. Since then, its composition has shifted to mostly zinc to reduce costs. However, despite the adjustments, DOGE maintains that its production remains financially impractical.
Although DOGE’s big budget-cutting strategies may be seen as optimistic, Musk has calmed some expectations. In a recent interview, he acknowledged that while $2 trillion is the “best-case outcome,” the initiative may only reach a more modest target of $1 trillion in total cuts.
“I think we’ll try for $2 trillion. I think that’s like the best-case outcome. Good shot at getting $1 [trillion].” Musk said earlier this month during an interview with Stagwell Inc. CEO Mark Penn.