Switch to $1 coins
It's not often that our government has a chance to come together on bipartisan measures to reduce our deficit without raising taxes or cutting spending. But we have that opportunity right now: It's time to switch from old-fashioned, expensive dollar bills to the modern and more efficient dollar coin.
This change would save money. The Government Accountability Office has examined the issue eight times over the last 25 years and every time has found that the transition to the dollar coin would save taxpayers billions. By my calculations, the switch would save us more than $13 billion over 30 years.
Modernizing our one-dollar currency will not only benefit all Americans, it will also have a positive impact in Philadelphia. The U.S. Mint in Philadelphia is one of two facilities in the country that produces circulating coins. Ditching the dollar bill for the dollar coin will help ensure that the Philadelphia Mint stays at full production, helping to preserve the jobs and economic benefits attributed to hosting a mint facility.
Additional benefits to switching to dollar coins include improving the environment, saving businesses time and money, and making life better for the visually impaired. My research found that small retail businesses could reap savings of $100 million or more per year. Handling lots of paper dollars takes time at the register and when making bank deposits. Industries that rely on high volumes of low-denomination payments, such as transit agencies and vending-machine operators, can save roughly $9 million annually.
A dollar coin, with a life expectancy of at least 30 years, is a more environmentally friendly form of currency compared with the non-recyclable paper note, which has a life expectancy of two to four years. Switching would save the equivalent of the amount of trash that more than 345,000 Americans (approximately the population of Cincinnati) put into a landfill each year.
Hard currency is particularly important to the visually impaired. They can more easily distinguish between denominations by feel, size, and weight. We are the only advanced nation producing currency that the blind cannot distinguish among. This is no small issue for the more than 6.6 million Americans who have a visual disability.
Some argue that the public doesn't support the coin - that it has failed numerous times before. The reality is that when the rationale behind the switch is explained, more than 60 percent of Americans support it. As a result of previous attempts to move to the coin, most businesses have already made the costly modifications to their machinery, with the expectation that savings would follow.
The problem with our prior efforts is that we kept producing dollar notes and ended up in the worst possible situation, with businesses absorbing the cost of modernizing but the government failing to keep its end of the deal, which prevented business from reaping the savings.
Earlier this summer, a bipartisan group of senators introduced the Currency, Optimization, and Innovation Savings (COINS) Act. Sens. Tom Harkin (D., Iowa), Mark Udall (D., Colo.), Mike Enzi (R., Wyo.), John McCain (R., Ariz.), and Tom Coburn (R., Okla.) recognize that this is the right step for Congress to take as it seeks solutions to the challenge of reducing the deficit.
Modernizing our currency would not only save the country money - it would put us on par with nearly every industrialized nation. Truth is, we're behind. The longer we wait, the more money we lose. Its just common sense.
Aaron Klein served as deputy assistant secretary of the treasury for economic policy and as chief economist for the Senate Banking, Housing, and Urban Affairs Committee. He is a consultant to the Dollar Coin Alliance and author of "Time for Change: Modernizing to the Dollar Coin Saves Taxpayers Billions."