The Obama administration has already reined in production of $1 coins. Now it’s looking to give the Treasury more leeway in minting some coins that have gotten more expensive than their face value — specifically, pennies and nickels.
Those provisions are in President Obama’s proposed 2013 budget, under a section titled “Increased Flexibility for the U.S. Mint in Coinage.”
The 2012 model penny is made up of 97.5 percent zinc, and 2.5 percent copper. This year’s nickel is 25 percent nickel; the rest is made of copper.
And you’ve likely heard — or experienced for yourself — that copper prices have been on a tear; zinc has also risen.
“This contributes to volatile and negative margins on both the penny and nickel,” according to the White House budget. “Recently, the penny has cost approximately 2.4 cents, and the nickel approximately 11.2 cents to produce.”
The Mint will need some time to research the best alternatives, according to administration documents.
Still, the Treasury will have a hard time making pennies pay for themselves, according to CNN Money’s Chris Isidore. As he notes, “the administrative cost of minting 4.3 billion pennies costs almost a half-cent per coin by itself, leaving precious little room to make a penny for less than a cent, no matter the raw material used.”