Rep. David Schweikert (R-Ariz.) and two other House Republicans — including supercommittee co-chairman Jeb Hensarling (R-Texas) — introduced legislation last week aimed at retiring the paper dollar. Schweikert said his bill would save $184 million a year and $5.5 billion over 30 years by transitioning to a dollar coin in four years, or as soon as $600 million worth of dollar coins are in circulation.
Schweikert said three billion paper dollars are shredded every year, and the constant need to destroy these dollars and create new ones is a cost the government can no longer bear. He said metal coins would last longer and therefore save money.
"At a time when we are staring down a record-breaking $1.3 trillion deficit, any commonsense measure that cuts billions needs to be given serious consideration," he said of his Currency Optimization, Innovation and National Savings (COINS) Act. "That is exactly what the COINS Act will do and why I am introducing it."
But Sens. Scott Brown (R-Mass.) and John Kerry (D-Mass.) introduced a competing bill over the weekend, the Currency Efficiency Act. That bill is aimed at protecting the paper dollar from what the senators call a "massive overproduction" of the "unpopular one dollar coin."
"The one dollar coin is misleading because it costs taxpayers so much more," Brown said. "In fact, we have over $1 billion worth of extra one dollar coins sitting idle in vaults and that's set to double over the next several years."
On one hand, the company that makes dollar paper for the US mint is in Dalton, Massachusetts, Crane & Co., the nation's first paper manufacturer dating back from the days of Paul Revere, so there's a definite reason why both Bay State Senators are defending the paper buck. On the other hand, the dollar coin is very, very popular with vending machine manufacturers...and Texas and Arizona account for over 100 of the country's nearly 800 such manufacturers. No surprise there, either. The House bill is supported by the vending machine lobbyist group, the Dollar Coin Alliance, its honorary chairman is former Arizona GOP Congressman Jim Kolbe.
And let's not forget the reason why there's a billion plus dollars in dollar coins sitting around US Mint warehouses is that 75% of Americans prefer the paper dollar because the dollar coin legislation in the late 90's was put forth by, you guessed it, Arizona Republican Jim Kolbe and the same groups promised us that the dollar coin would be wildly popular. It wasn't.
Now Republicans want to fix the issue and change the currency of the country itself to make vending machine makers happy, not to mention copper mines and smelters. Yes, there are environmental benefits to the dollar coin, but there are drawbacks as well.
Any time I see House Republicans pushing environmental benefits of something, I wonder what the catch is and why it hasn't been done already, and I'm thinking it has everything to do with the companies who want to make a mint off minting these coins. I don't mind releasing the coins we already have into circulation, but getting rid of the paper buck seems like a bad way to force people to use something they don't want to use.
Hey wait a minute, I thought Republicans were against that sort of thing, after all.
[UPDATE] Stan Collender at CG&G makes some good points as to why the COINS Act is nothing more than the GOP shifting corporate welfare dollars to their constituencies.
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