The U.S. House of Representatives passed on Monday legislation that would permanently end production of the penny for general circulation and modernize America’s coinage system.
“Washington has a spending problem, and it shows up in places big and small,” U.S. Rep. Lisa McClain (R-MI), House Republican Conference chairwoman and the bill’s sponsor, said. “If the federal government is spending nearly four cents to make a penny worth one cent, something is broken.”
The Common Cents Act would establish guidance to allow cash transactions to be rounded to the nearest five cents when exact change is unavailable while electronic payments and other non-cash transactions would be charged to the exact cent.
Existing pennies would remain legal tender and the U.S. Mint would continue to be permitted to produce collectible coins.
The bill would direct the Federal Reserve to develop a national plan for the pennies in circulation. The Treasury would be required to notify Congress before discontinuing any other circulating coin.
Finally, the bill authorizes the use of a lower-cost nickel composition if testing shows it will reduce production costs without significantly disrupting coin-operated machines.
The bill moved to the Senate Committee on Banking, Housing, and Urban Affairs on Tuesday.