One of Elon Musk’s first goals in his new role as an advisor to Donald Trump may be to eliminate the penny, according to a comment his new advisory board made on X.
Trump has put Musk, the world’s richest man and the CEO of Tesla, X, and SpaceX, in charge of the Department of Government Efficiency, which is not actually a federal agency, but more of a small advisory board. Its mission is supposedly to find ways to make the government more efficient and cost effective.
On Tuesday, DOGE shared a message noting that the US spends approximately 3 cents to mint every penny. Pennies are only worth one cent.
“The penny costs over 3 cents to make and cost U.S. taxpayers over $179 million in FY2023,” the message from DOGE read. “The Mint produced over 4.5 billion pennies in FY2023, around 40% of the 11.4 billion coins for circulation produced.”
Questioning the continued use of the penny is not new, nor is the reality that making one is more expensive than its actual value. Back in 2016, the US spent approximately 1.5 cents for each penny minted, and a year prior then-Treasury Secretary Jacob Lew pushed to drop the coin altogether.
The cost to make a penny has only increased in recent years. That’s largely thanks to the price of zinc — which makes up the bulk of a penny — doubling in cost since 2016, CBS News reports.
Proponents of getting rid of the penny have suggested just using rounding to deal with any transaction that calls for a penny, but a 2020 blog post from the Federal Reserve Bank of Richmond pointed out that rounding can significantly change the value of an item, especially when the item is inexpensive.
The penny isn’t the only coin that costs more to make than its value; the US Mint’s 2024 report found that every nickel produced costs about 14 cents to make. It remains to be seen if DOGE will go after Thomas Jefferson after it deals with Abraham Lincoln.
Musk has said that DOGE will slice $500 billion in annual federal spending, but hitting that number will take slashing way more than penny production.
According to Trump, DOGE will “slash excess regulations, cut wasteful expenditures, and restructure federal agencies,” although critics have claimed this means he hopes to free up money by doing less, with fewer rules and fewer people.
For example; Trump spoke to Fox News’ Sean Hannity on Wednesday night for his first post-inauguration interview. Early in their chat, Trump said he was going to “look at” the Federal Emergency Management Agency and expressed his belief that the states should be left to deal with their own problems.
Musk was tapped to run DOGE alongside failed presidential candidate and anti-woke businessman Vivek Ramaswamy, but Ramaswamy ducked out earlier this week, potentially due to “ideological rifts” with Musk and the Trump team. Instead, he will reportedly run to replace Mike DeWine as Ohio’s Governor.
