Getting rid of the penny introduces a new problem: nickels

President Donald Trump says he has ordered the US Mint to stop making pennies, which he correctly says cost more than one cent to produce.

President Donald Trump says he has ordered the US Mint to stop making pennies, which he correctly says cost more than one cent to produce. “For far too long the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful!” he said in a post on his Truth Social platform. “Let’s rip the waste out of our great nations budget, even if it’s a penny at a time.” Trump actually undersold the cost argument — pennies cost more than 3 cents to produce. But there’s a problem with his plan: Phasing out the penny could result in needing to make more nickels, and the US Treasury Department loses far more money on every nickel than it does on every penny. “Without the penny, the volume of nickels in circulation would have to rise to fill the gap in small-value transactions. Far from saving money, eliminating the penny shifts and amplifies the financial burden,” said American for Common Cents, a pro-penny group funded primarily by Artazn, the company that has the contract to provide the blanks used to make pennies. According to the latest annual report from the US Mint, each penny cost 3.7 cents to make, including the 3 cents for production costs, and 0.7 cents per coin for administrative and distribution costs. But each nickel costs 13.8 cents, with 11 cents of production costs and 2.8 cents of administrative and distribution costs. These figures are for the government’s fiscal year, which ends on September.