Trump aims to “wasteful” spending by ordering an end to penny production

president Donald Trump We ordered the production of new pennys to be stopped. He said it helps reduce “vain” government spending.

“For a long time, the US has been minting pennies that cost literally more than two cents,” Trump said in the Truth Social Post. “This is extremely wasteful! I have instructed the US Treasury secretary to stop production of new pennies. Let’s tear waste from the budget of a great nation, even if it’s a pennie at once.” Trump wrote.

It is not clear whether the president has the authority to suspend the production of one-cent coins. According to The US Constitutionas permitted by the Supreme Court, monetary capacity is “exclusive” to Congress. According to federal law, the Treasury Secretary says they can create and issue coins that are necessary for the needs of the US.

But at least one Wall Street analyst expects Penny’s days to be counted. Jaret Seiberg of TD Cowen said the suspension would likely pass the judicial review and lead to a lack of coins.

“This is likely to happen because we believe this order will withstand judicial review,” Seberg wrote Monday. “We are worried that this will lead to a shortage of pennys. This could force merchants to pay more banks for coins, and we also put legal risks on merchants and banks. I’ll add it.

Seiberg said he expects this to support the move towards electronic payments. visa, Mastercard Other real-time payment networks.

What’s clear is that pennies cost more than they’re worth. In 2024, US Mint spent 3.69 cents making each penny. Annual Report. In other words, the cost of each penny exceeds the face value for the 19th consecutive year.

The latest US mint report suggests that nickel looks better at its back. Each piece of 5 cents costs 13.78 cents of mint.