Congress considers swapping $1 bill for coin to save cash

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Many nations, including Canada and the United Kingdom, have scrapped paper currency for metal coins when it comes to smaller denominations, and have reaped the fiscal benefits. For example, Canada has saved $450 million by switching to a $1 coin, according to the Government Accountability Office (GAO).

The government watchdog released a study Thursday that found replacing $1 bills with dollar coins could potentially save the government $4.4 billion every 30 years. A primary reason for the savings is that coins last longer in circulation than paper money. On average, a paper dollar will remain usable for 4.7 years, while a coin can still be in circulation for three decades.

Those savings are actually less than a March 2011 GAO study on the issue, which found that using coins could save the government $5.5 billion. The primary reason the amount of savings fell is due to advancements that have extended the lifespan of paper money — the 2011 study determined that paper bills lasted, on average, just 1.5 years in circulation.

However, the study also noted that such a transition would come with some costs. Many industries would have to update their equipment to accept dollar coins, although some transit agencies are already prepped to accept dollar coins, according to the report.

The GAO has been recommending Congress adopt dollar coins for more than two decades, but so far the idea has failed to gain traction with both lawmakers and the public.

When surveyed in 2002, 64 percent of the public opposed the elimination of the dollar bill, the GAO said in a 2011 report. However, when informed that the switch could save the government hundreds of millions of dollars a year, that number dropped to 37 percent.

Americans' love of the paper dollar has increased recently. The GAO noted a 2006 Gallup poll, which found that 64 percent of respondents still wanted to keep the paper dollar even if the government could save half a billion dollars a year by scrapping it. 

Beyond adopting a dollar coin full-time, lawmakers also probed the idea of changing the makeup of the nation's existing coins to make their production more affordable. Rep. Steve Stivers (R-Ohio) noted that it currently costs the government more to produce pennies and nickels than their face value. He has introduced legislation that would allow the Treasury Department to make pennies primarily out of steel and give them a copper color, as opposed to using the existing copper-zinc alloy.