TheWeekInCongress.com
Week Ending April 29, 2005
HR 902 to improve circulation of the $1 coin, create a new bullion coin and for other purposes.
BRIEF
The bill would authorize redesigning and circulating $1 coins featuring each President of the US beginning January 1, 2007 until all Presidents who have finished their terms are honored. The reverse of the coins would feature the Statue of Liberty or a liberty related theme. The only exception would be the coin featuring President Chester Arthur (20th) the reverse of which would feature women’s suffrage leader Alice Paul.
The bill would also require the Treasury to issue $10 gold bullion coins featuring the spouse of each of the Presidents and an alternative design if the President served without a spouse. An alternative to the bullion coin would be a bronze medal featuring the spouses.
2010 Lincoln Cents would see four different reverse sides but the Victor Brenner depiction of the 16th President would be unchanged.
Remembering the difficult course the Susan B Anthony dollar took the bill would look to overcome obstacles to circulation such as vending machine use, easily identifying the coin by the blind and packaging to businesses.
Sponsor: Representative Michael N. Castle (R-DE-at large)
Vote: Passed House 422 to 6 (April 26, 2005) (RC 136)
Cost to the taxpayers: The CBO calculates that after the initial $3 million startup costs the sales of the coins would ultimately produce about $280 million by 2015. Those funds would be earmarked to pay against the public debt.
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MORE INFORMATION
FINDINGS
The Congress finds as follows:
(1) There are sectors of the United States economy, including public transportation, parking meters, vending machines and low-dollar value transactions, in which the use of a $1 coin is both useful and desirable for keeping costs and prices down.
(2) For a variety of reasons, the new $1 coin introduced in 2000 has not been widely sought after by the public, leading to higher costs for merchants and thus higher prices for consumers.
(3) The success of the 50 States Commemorative Coin Program for circulating quarter dollars shows that a design on a United States circulating coin that is regularly changed in a manner similar to the systematic change in designs in such Program radically increases demand for the coin, rapidly pulling it through the economy.
(4) The 50 States Commemorative Coin Program also has been an educational tool, teaching both Americans and visitors something about each State for which a quarter has been issued.
(5) A national survey and study by the Government Accountability Office has indicated that many Americans who do not seek, or who reject, the new $1 coin for use in commerce would actively seek the coin if an attractive, educational rotating design were to be struck on the coin.
(6) The President is the leader of our tripartite government and the President's spouse has often set the social tone for the White House while spearheading and highlighting important issues for the country.
(7) Sacagawea, as currently represented on the new $1 coin, is an important symbol of American history.
(8) Many people cannot name all of the Presidents, and fewer can name the spouses, nor can many people accurately place each President in the proper time period of American history.
(9) First Spouses have not generally been recognized on American coinage.
(10) In order to revitalize the design of United States coinage and return circulating coinage to its position as not only a necessary means of exchange in commerce but also as an object of aesthetic beauty in its own right, it is appropriate to move many of the mottos and emblems, the inscription of the year, and the so-called `mint marks' that currently appear on the 2 faces of each circulating coin to the edge of the coin, which would allow larger and more dramatic artwork on the coins reminiscent of the so-called `Golden Age of Coinage' in the United States, at the beginning of the Twentieth Century, initiated by President Theodore Roosevelt, with the assistance of noted sculptors and medallic artists James Earle Fraser and Augustus Saint-Gaudens.
(11) Placing inscriptions on the edge of coins, known as edge-incusing, is a hallmark of modern coinage and is common in large-volume production of coinage elsewhere in the world, such as the 2,700,000,000 2-Euro coins in circulation, but it has not been done on a large scale in United States coinage in recent years.
(12) Although the Congress has authorized the Secretary of the Treasury to issue gold coins with a purity of 99.99 percent, the Secretary has not done so.
(13) Bullion coins are a valuable tool for the investor and, in some cases, an important aspect of coin collecting.
It is the sense of the Congress that--
(1) the enactment of this Act will serve to increase the use of $1 coins generally, which will increase the circulation of the so-called `Sacagawea-design' $1 coins that have been and will continue to be minted and issued;
(2) the continued minting and issuance of the so-called `Sacagawea-design' $1 coins will serve as a lasting tribute to the role of women and Native Americans in the history of the United States;
(3) while the American tradition of not issuing a coin with the image of a living person has served the country well and deserves to be continued as a general practice, in a series of coins commemorating former Presidents, all former Presidents should be so honored notwithstanding such tradition;
(4) the full circulation potential and cost-savings benefit projections for the $1 coins are not likely to be achieved unless the coins are delivered in ways useful to ordinary commerce;
(5) in order for the circulation of $1 coins to achieve maximum potential--
(A) the coins should be as attractive as possible; and
(B) the Director of the United States Mint should take all reasonable steps to ensure that all $1 coins minted and issued remain tarnish-free for as long as possible without incurring undue expense;
(6) if the Secretary of the Treasury determines to include on any $1 coin minted under section 5112(n) of title 31, United States Code (as added by section 102 of this Act) a mark denoting the United States Mint facility at which the coin was struck, such mark should be edge-incused;
(7) at such time as the Secretary of the Treasury determines to be appropriate, and after consultation with the Board of Governors of the Federal Reserve System and the submission of notice to the Congress, the Secretary should declare to be obsolete any circulating $1 coin that bears the design of the $1 coins being issued immediately before the issuance of coins with the design referred to in section 5112(n)(7) of title 31, United States Code;
(8) in connection with the introduction of the $1 coins under the Presidential $1 Coin Program--
(A) the coins should not be introduced with an overly expensive taxpayer-funded public relations campaign; and
(B) the Director of the United States Mint, a bureau in the Department of the Treasury, should work with consumer groups, media outlets, and schools to ensure an adequate amount of news coverage about the start of the coin program so consumers will know of the availability of the coins;
(9) the Board of Governors of the Federal Reserve System and the Secretary of the Treasury should take steps to ensure that an adequate supply of $1 coins are available for commerce and collectors at such places and in such quantities as are appropriate by--
(A) meeting, from time to time but no less frequently than quarterly, with a coin users group that includes representatives of merchants who would benefit from the increased usage of $1 coins, vending machine and other coin acceptor manufacturers, vending machine owners and operators, transit officials, municipal parking officials, depository institutions, coin and currency handlers, armored-car operators, car wash operators, and coin collectors and dealers to accurately gauge demand for coins and to anticipate and eliminate obstacles to the easy and efficient distribution and circulation of $1 coins as well as all other circulating coins;
(B) submitting a semiannual report to the Congress containing an assessment of the remaining obstacles to the efficient and timely circulation of coins, and particularly $1 coins, together with such recommendations for legislative action the Board and the Secretary may determine to be appropriate;
(C) consulting with industry representatives to encourage operators of vending machines and other automated coin-accepting devices in the United States to accept coins issued under the Presidential $1 Coin Program and the so-called `Sacagawea-design' $1 coins, and to include notices on the machines and devices of such acceptability;
(D) ensuring that during an introductory period, all institutions that want unmixed supplies of each newly-issued design of $1 coins are able to obtain such unmixed supplies; and
(E) consulting with representatives of depository institutions and armored-car operators to support the availability of $1 coins in packaging of sizes and types appropriate for and useful to ordinary commerce, including rolled coins; and
(10) the Director of the United States Mint should take all steps necessary to expand the marketplace for bullion coins, and reduce barriers to the sale of bullion coins, by ensuring that--
(A) the greatest number possible of reputable, reliable, and responsible dealers are qualified to offer for sale all bullion coins struck and issued by the United States Mint; and
(B) all such dealers and their customers have equal and timely access to all new issues of such bullion coins.
The Congress finds as follows:
(1) Abraham Lincoln, the 16th President, was one of the Nation's greatest leaders, demonstrating true courage during the Civil War, one of the greatest crises in the Nation's history.
(2) Born of humble roots in Hardin County (present-day LaRue County), Kentucky, on February 12, 1809, Abraham Lincoln rose to the Presidency through a combination of honesty, integrity, intelligence, and commitment to the United States.
(3) With the belief that all men are created equal, Abraham Lincoln led the effort to free all slaves in the United States.
(4) Abraham Lincoln had a generous heart, with malice toward none and with charity for all.
(5) Abraham Lincoln gave the ultimate sacrifice for the country he loved, dying from an assassin's bullet on April 15, 1865.
(6) All Americans could benefit from studying the life of Abraham Lincoln, for Lincoln's life is a model for accomplishing the `American dream' through honesty, integrity, loyalty, and a lifetime of education.
(7) The year 2009 will be the bicentennial anniversary of the birth of Abraham Lincoln.
(8) Abraham Lincoln was born in Kentucky, grew to adulthood in Indiana, achieved fame in Illinois, and led the nation in Washington, D.C.
(9) The so-called `Lincoln cent' was introduced in 1909 on the 100th anniversary of Lincoln's birth, making the obverse design the most enduring on the nation's coinage.
(10) President Theodore Roosevelt was so impressed by the talent of Victor David Brenner that the sculptor was chosen to design the likeness of President Lincoln for the coin, adapting a design from a plaque Brenner had prepared earlier.
(11) In the nearly 100 years of production of the `Lincoln cent', there have been only 2 designs on the reverse: the original, featuring 2 wheat-heads in memorial style enclosing mottoes, and the current representation of the Lincoln Memorial in Washington, D.C.
(12) On the occasion of the bicentennial of President Lincoln's birth and the 100th anniversary of the production of the Lincoln cent, it is entirely fitting to issue a series of 1-cent coins with designs on the reverse that are emblematic of the 4 major periods of President Lincoln's life.
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CONGRESSIONAL BUDGET OFFICE REPORT (Segment)
Presidential $1 Coin Program. H.R. 902 would create a series of $1 coins commemorating all former U.S. Presidents. The Presidential coin would have distinctive tactile and visual features on the edge of the coin. The bill would allow the Mint to continue to issue the Golden Dollar. According to the Mint, it would need at least 18 months to design, test, and produce a new $1 Presidential coin for circulation. Thus, assuming this bill is enacted by the end of fiscal year 2005, CBO expects that the first two new coins would begin circulating by the middle of fiscal year 2007. CBO estimates start-up costs for producing a new $1 coin would increase direct spending by about $3 million over the 2006-2007 period, based on the experience of prior new issues by the Mint.
With the development of a $1 Presidential coin, there would be three $1 coins in circulation, including the Susan B. Anthony and the Golden Dollar. Based on information from the Mint, CBO would not expect the Treasury would remove any of these existing coins from circulation, and such a change by the Mint would not be done without explicit Congressional authorization.
H.R. 902 would authorize the Mint to include the new $1 coin in collector coin sets sold to the public. Adding four new $1 coins to the Mint's current sets could increase offsetting collections to the U.S. Mint Public Enterprise Fund if the new coins increase collectors' interest in the sets. However, CBO estimates that any increase in offsetting collections from the sale of commercial products would be small and primarily of a one-time nature over the first two years of the program. In addition, CBO estimates that the Mint would retain and spend any additional collections, resulting in a negligible net budgetary effect over the next 10 years.
First-Spouse Bullion Coin. H.R. 902 would direct the Mint to produce a gold bullion coin for investors, honoring the spouses of former Presidents. The new gold bullion coin would be produced in the same sequence as the $1 Presidential coins. The bullion coin would feature an image of the spouse of the former President and the reverse would feature an image of her life and work. CBO expects that the first gold bullion coins would be ready at the same time as the $1 Presidential coin.
Public Law 104-52, which established the U.S. Mint Public Enterprise Fund, requires the Mint to transfer any excess funds to the general fund of the Treasury at least annually. Based on information from the Mint and the numismatic community, CBO expects that the First Spouse gold bullion coin would generate sales similar to recent commemorative coins. In addition, the Mint could sell bronze duplicates to the public; however, based on the sales of previous duplicates, we do not expect that those sales would be large. CBO estimates that the Mint would produce about 10,000 gold bullion coins annually generating about $1 million a year in excess funds that would be recorded in the budget as offsetting receipts.
Abraham Lincoln Bicentennial 1 Cent Coins. H.R. 902 would authorize the U.S. Mint to change the design of the current 1 cent coin beginning in calendar year 2009 to celebrate the 200th anniversary of the birth of Abraham Lincoln. Four pennies would be issued to reflect the four major periods in Lincoln's life. The legislation also would require the Mint to produce a new copper penny in 2009 with the same metallic content as the 1909 penny (Lincoln cent) in amounts appropriate for the numismatic community.
According to the Mint, it would take approximately six months to design, test, and produce the 1 cent coins for circulation in 2009. CBO estimates that designing and preparing dies for a new 1 cent coin would cost less than $100,000 in 2008. In addition, production of the copper penny would be based on market research and requests. Adding a new 1 cent coin to the Mint's current sets could increase offsetting collections to the U.S. Mint Public Enterprise Fund if the new coin increases collectors' interest in the sets. However, any increase in offsetting collections from the sale of commercial products would be available to the Mint to retain and spend and would have a negligible net budgetary impact over time.
Seigniorage
In addition to the bill's effects on direct spending, by increasing the public's holding of dollar coins, H.R. 902 also would result in additional federal resources for financing the deficit.
The seigniorage, or profit, from placing the new coins in circulation would reduce the amount the government would otherwise borrow from the public to finance the deficit. By circulating a new $1 Presidential coin with the current Golden Dollar and Susan B. Anthony coins, the legislation would increase the seigniorage earned if the new $1 coin is more widely circulated. CBO estimates that there would be no significant effect on seigniorage from the new 1 cent coins.
A Government Accountability Office report (GAO-02-896, September 2003) noted that, after a multimillion dollar marketing and advertising campaign, the Golden Dollar, like the Susan B. Anthony $1 coin, has not achieved widespread use. It has increased the public's interest in collecting the $1 coin but is not widely circulating. Barriers to the public's acceptance include the continued circulation of the $1 bill and the commingling of the Susan B. Anthony and Sacagwea dollars in rolls for distribution, which would not be eliminated by H.R. 902.
The Mint's 50 State Quarters program, involving a set of recurring designs commemorating each state, has been credited with generating renewed interest in holding more coins by collectors and the public. The production of quarters increased from 1.7 billion coins in fiscal year 1998 to over 6 billion in fiscal year 2000 when the 50 State Quarters program began. By fiscal year 2004, demand for quarters had fallen to about 2.2 billion quarters. The Mint estimates that the 50 State Quarters program has generated about $4.6 billion in seigniorage since the program began in 1999.
Taking into account the experience of the 50 State Quarters program, information from the numismatic community, and the public's continued resistence to the use of dollar coins, CBO expects that the new $1 Presidential coin would increase the public's interest in collecting coins, but it would continue to face barriers to widespread circulating use. CBO expects that most of the demand for the $1 Presidential coin would be from collectors. According to the Mint, the federal government is currently putting into circulation about 55 million Golden Dollar coins annually, with seigniorage of 80 cents per coin. CBO expects that demand for the new $1 Presidential coin would double the current demand for the dollar coin to about 100 million annually in 2008. After that, we expect that production would decline, following the experience of the 50 State Quarters program. Hence, CBO estimates that replacing the Golden Dollar with the $1 Presidential coin would increase seigniorage by about $280 million over the 2006-2015 period.
Intergovernmental and private-sector impact: H.R. 902 contains no intergovernmental or private-sector as defined in UMRA and would not affect the budgets of state, local, or tribal governments.
Estimate prepared by: Federal Costs: Matthew Pickford; Impact on State, Local, and Tribal Governments: Sarah Puro; Impact on the Private Sector: Paige Piper/Bach.
Estimate approved by: Peter H. Fontaine, Deputy Assistant Director for Budget Analysis.
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No reproduction or distribution without written permission from TheWeekInCongress.com.