There’s a New Coin Idea to Solve the Unemployment Extension Deadlock

Just like how the $1 trillion coin didn’t end the debt ceiling debate, the $1 coin won’t end the unemployment debate.

The United States Mint showcases the 2007 Presidential series $1 coins, featuring the Statue of Liberty on the reverse.
National Journal
Jack Fitzpatrick
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Jack Fitzpatrick
Jan. 14, 2014, 5:55 a.m.

Sen­at­ors have spent nearly a week de­bat­ing spend­ing-cut amend­ments that would cov­er the cost of the un­em­ploy­ment-in­sur­ance bill, but it turns out they could save more than twice as much money in one fell swoop.

The $1 coin — the rarely used, much-ma­ligned gold dol­lar of­ten fea­tur­ing Sacagawea or Martha Wash­ing­ton — could save the fed­er­al gov­ern­ment $13.8 bil­lion over 30 years if the gov­ern­ment stopped pro­du­cing pa­per dol­lars, ac­cord­ing to the Dol­lar Coin Al­li­ance. The ad­vocacy group, led by former Reps. Jim Kolbe of Ari­zona and Tim Penny of Min­nesota, is push­ing for a switch from bills to coins as a solu­tion to the un­em­ploy­ment in­sur­ance bill’s cost-off­set de­bate.

Al­though coins cost more to pro­duce, they last longer than pa­per bills. A new $1 bill lasts only about 4.7 years be­fore be­ing taken out of cir­cu­la­tion, ac­cord­ing to the Fed­er­al Re­serve. Coins, mean­while, can be used for dec­ades. And be­cause the U.S. Mint has already been pro­du­cing dol­lar coins for years, it has already made much of the ini­tial in­vest­ment, said Shawn Smeal­lie, ex­ec­ut­ive dir­ect­or of the Dol­lar Coin Al­li­ance.

“The reas­on we’re push­ing this on the Hill right now is [that] all the amend­ments that try to pay for this cut a pro­gram or pay a tax,” Smeal­lie said. “You can do this without do­ing any of that. Our point is, it’s in range of the sav­ings and you’re not hurt­ing any­body.”

Des­pite the sav­ings, the al­li­ance has found little sup­port. Even law­makers who gen­er­ally fa­vor switch­ing to the dol­lar coin are wary of us­ing 30-year sav­ings to pay for a three-month un­em­ploy­ment-in­sur­ance ex­ten­sion.

Sen. Mi­chael En­zi, R-Wyo., has no plans to in­clude the dol­lar coin in an amend­ment to the un­em­ploy­ment-in­sur­ance bill be­cause of the time it would take to save the money, said spokes­man Daniel Head.

And the Her­it­age Found­a­tion, which sup­ports a spend­ing-cut amend­ment to the bill, fa­vors re­du­cing fed­er­al pen­sions or lim­it­ing auto­mat­ic pay in­creases for fed­er­al em­ploy­ees, said labor policy ana­lyst James Sherk.

Per­haps quick-fix coins wer­en’t meant to be. In Janu­ary 2013, the idea of a $1 tril­lion plat­in­um coin offered to by­pass the de­bate over the fed­er­al debt ceil­ing. That idea also did not come to fruition.

The dol­lar coin is a more plaus­ible idea, and may even even­tu­ally come to life in­de­pend­ent of the un­em­ploy­ment in­sur­ance bill. House and Sen­ate ver­sions of the Cur­rency Op­tim­iz­a­tion, In­nov­a­tion, and Na­tion­al Sav­ings Act were re­ferred to com­mit­tees last year.

Mean­while, Smeal­lie thinks Amer­ic­ans are simply be­ing stub­born about switch­ing to a dol­lar coin. The U.S., he said, is lag­ging be­hind while Canada, the United King­dom, and much of Europe uses coins for up to two units of each cur­rency.

The reas­on the coun­try is leav­ing $13.8 bil­lion on the table is simple, Smeal­lie said: “In­er­tia. Amer­ic­ans don’t like change,” he said. “We were wor­ried about go­ing to di­git­al TV.”

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