DOGE Could Make Huge Change to Cash

The newly created Department for Government Efficiency (DOGE) has criticized how much it costs to make the U.S. penny.

Why It Matters

The use of cash has been declining in recent years, according to the Federal Reserve's 2024 report on consumer payments. Although the report doesn't specifically address penny usage, it notes that only 16 percent of payments in 2023 were made in cash, a decrease from 18 percent in 2022.

DOGE, which is headed up by Elon Musk, was created to be responsible for finding areas of the federal government where cost cuts can be made.

What To Know

On Tuesday, DOGE's new X, formerly Twitter, account said that in fiscal year 2023, taxpayers spent more than $179 million producing over 4.5 billion pennies, with each coin costing more than three cents to make—three times its actual value.

"The penny costs over 3 cents to make and cost U.S. taxpayers over $179 million in FY2023," the post reads. "The Mint produced over 4.5 billion pennies in FY2023, around 40 percent of the 11.4 billion coins for circulation produced. Penny (or 3 cents!) for your thoughts."

DOGE was finalized by an executive order on Trump's first day in office, and is a commission designed to streamline government operations and reduce their size.

The high cost of producing pennies is primarily due to the cost of materials. Pennies are mostly made of zinc, with a copper overlay to give them their distinctive color. Originally made of pure copper, pennies have been composed of nearly 98 percent zinc since 1982, according to JM Bullion.

However, zinc has become more expensive over time.

Stock image: Jar of U.S. pennies. GETTY

The U.S. Mint's 2023 report shows that the cost of producing a penny rose by 12.9 percent, the largest increase among all coins.

In 2024, the cost of producing pennies has risen further. According to the U.S. Mint's 2024 annual report, it now costs approximately 3.7 cents to manufacture and distribute a single penny.

There have been recent calls in Congress over whether it is worth keeping the penny in circulation. In November 2024, Republican Senator Joni Ernst of Iowa, said on X: "Currently, the federal government is paying 3 cents to produce a penny and 11 cents to make a nickel. That makes no sense!"

What People Are Saying

X users responded to the DOGE account suggestion.

One user wrote: "Well, that's at least 13.5 billion dollars saved that would make people's lives easier. Transactions would be more efficient and easier to calculate."

Another user said: "The penny is part of our tradition as a nation, but yeah we should be producing way fewer."

What Happens Next

It's unclear from a single post whether DOGE intends to advocate for the federal government getting rid of the penny, and DOGE alone lacks the authority to discontinue the coin. Eliminating the penny would require an act of Congress.