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Discussion

Sam Dewinski:

Congress turned an administrative decision into durable statutory policy. Treasury had already halted regular circulating-penny production in 2025, relying on its view that existing law allowed the Mint to make only coins needed for commerce. The House passed the bill on September 14, and the Senate approved it by unanimous consent on September 28. Historically, that follows a familiar pattern: a denomination becomes inconvenient, informal practices grow around it, and lawmakers eventually formalize the workaround.

Sofia Jadler:

The legal distinction is central. Ending production is not abolishing the penny. The bill directs Treasury to stop producing one-cent coins for general circulation while allowing limited collector versions. Existing pennies remain legal tender for debts, taxes, and public charges. Congress is closing the supply line, not invalidating the coins already in people’s hands.

Kate Burvish:

The economic case begins with unit cost. The Mint’s 2025 figures put the cost of producing and distributing a penny at about 3.02 cents. Treasury and the Mint estimate roughly 56 million dollars in immediate annual material savings. That is a real saving, but it is not the same as a complete net-benefit calculation. Transition expenses and effects on other denominations still matter.

Red Velhouse:

The production question may be settled, but the consequences depend on how much cash remains in use.

Kate Burvish:

Cash is a minority payment method, not an irrelevant one. It represented about 14 percent of consumer payments in 2024, while 83 percent of consumers reported using cash during the previous 30 days. The average consumer made roughly seven cash payments a month. The subgroup comparisons come from different data: in 2023 behavior reported by the Federal Reserve’s 2024 Diary, households earning under 50,000 dollars used cash for about 28 percent of payments, compared with 13 percent among higher-income households. Consumers 55 and older used cash for about 22 percent, versus 12 percent among younger consumers. Those figures are not all from the same survey year, but they point in the same direction: exposure is uneven.

Sofia Jadler:

Banking access sharpens that distributional issue. The Federal Deposit Insurance Corporation, or FDIC, found that 4.2 percent of U.S. households—about 5.6 million—were unbanked in 2023. About 66.2 percent of unbanked households relied entirely on cash. That does not describe every cash user, but it identifies people for whom switching to electronic payment may not be simple.

Red Velhouse:

Before Congress created a national rule, retailers and customers had a local workaround: take-a-penny, leave-a-penny trays. What did those trays actually accomplish?

Sam Dewinski:

They were informal coin-sharing systems. A customer short one or two pennies could take them to make exact change, while someone receiving unwanted pennies could leave them for the next customer. The practice became established in convenience stores, gas stations, and other small-retail settings by the late twentieth and early twenty-first centuries, although the sources do not establish one inventor or precise national starting date.

Kate Burvish:

The trays reduced handling costs without a formal policy. A customer could avoid breaking a larger bill, and a cashier could use one penny from the tray rather than assemble a more cumbersome combination of coins. So the tray was both a complaint and a practical solution. It shows that pennies were inconvenient, not that they were useless to everyone.

Sofia Jadler:

The bill creates a permitted accommodation for covered cash transactions. When exact change cannot be provided, it allows the final amount to be rounded to the nearest five cents, giving businesses that follow the statutory method a federal safe harbor. Totals ending in one, two, six, or seven cents generally round down; totals ending in three, four, eight, or nine round up. The covered amount includes taxes. Electronic payments, checks, credit cards, and similar methods can still settle to the exact cent.

Sofia Jadler:

The federal safe harbor protects a business that follows the statutory method, but it does not make implementation identical everywhere. States and retailers still face questions about tax calculations, disclosures, refunds, receipts, and point-of-sale systems. Congress reduces federal uncertainty while leaving practical administration to the institutions that must operate the rule.

Kate Burvish:

Symmetrical rounding should be close to neutral across a large number of transactions, but averages do not determine every customer’s result. Purchase patterns, retailer pricing, and frequency of cash use can produce different outcomes. Someone paying cash twice a month may barely notice; someone making most purchases in cash encounters the rule repeatedly.

Red Velhouse:

If pennies are inconvenient, the tempting next question is whether dimes should become the smallest coin.

Kate Burvish:

Dimes look healthier economically, but the comparison needs precision. In fiscal year 2025, the Mint reported unit costs of about 6.77 cents for a dime, 14.53 cents for a quarter, 13.31 cents for a nickel, and 3.02 cents for a penny. A dime costs less than its ten-cent face value, unlike the penny and nickel. But more dimes would still require metal, labor, manufacturing capacity, distribution, and inventory. There is no official forecast showing how many additional dimes a replacement system would need.

Sam Dewinski:

Dimes also offer a physical advantage. A dime weighs 2.268 grams, compared with five grams for a nickel and 5.670 grams for a quarter. Ten dimes make a dollar weighing about 22.68 grams, while twenty nickels weigh about 100 grams. That is meaningful for institutions handling large amounts of coin. But denominations are a network: removing one changes the usefulness and workload of the others.

Sofia Jadler:

And a dime-only system would not preserve the bill’s five-cent framework. Dimes provide ten-cent steps, so cash totals would have to round to the nearest ten cents or retain another denomination. That would require new legislation or a different legal structure. It would also create a larger individual adjustment: five-cent rounding can move a total by at most two cents, while ten-cent rounding can move it by as much as five.

Sam Dewinski:

A drawer containing only dimes and quarters would not solve everything either. Although those denominations share a five-cent mathematical relationship, some amounts remain awkward: 15 cents cannot be made with only dimes and quarters, while 20, 25, 30, and 35 cents can. A spreadsheet may tolerate that gap; a busy register is less forgiving.

Kate Burvish:

The likely tradeoff is lighter, cheaper value storage versus fewer convenient price points. A dime-centered system could work where cash totals are rounded to ten cents and electronic payments dominate. It would be less convenient for frequent cash purchases. The more plausible transition is quarters and dimes alongside nickels, or quarters and dimes with a continuing five-cent rounding rule.

Sofia Jadler:

The bill itself points toward that cautious path. Congress authorized testing a cheaper nickel with an inner zinc layer and outer nickel layer, subject to durability and machine-compatibility testing. That anticipates continuing demand for five-cent cash increments. Authorization is not implementation: Treasury must test the coin, and vending machines, counting equipment, retailers, and states must be able to use it.

Red Velhouse:

So eliminating the penny could expose the nickel as the next cost problem.

Kate Burvish:

That is a real second-order risk. A nickel cost about 13.31 cents to produce and distribute in 2025—more than twice its face value. If cash increasingly settles in five-cent increments, demand for nickels could rise even as each coin remains expensive. The proposed alternative composition is an attempt to prevent penny savings from simply shifting production losses onto the nickel.

Sofia Jadler:

The remaining uncertainties are practical as well as legal. Existing pennies remain valid, but estimates of how many are still circulating differ substantially. The Federal Reserve distributes Mint-produced coins and accepts pennies through normal deposit channels, so ending production does not mean pennies vanish overnight. If enacted, the bill would also require a Federal Reserve strategic plan within 90 days covering orders, deposits, circulation, and related operations.

Sam Dewinski:

Historically, the most revealing outcome may be gradual rather than dramatic. People will keep using old pennies, some stores will retain informal coin practices, and others will round cash totals. The denomination may disappear from production long before it disappears from memory—or from a forgotten drawer at home.

Red Velhouse:

The central issue is not whether the penny is being manufactured today; regular circulating production has already stopped. It is whether the Common Cents Act will deliver projected savings without shifting hidden costs onto cash-dependent consumers, retailers, states, or the nickel. Cash represents a minority of payments, but it remains widely used and disproportionately important to some households. The Federal Reserve’s 2024 data show both the broad reach of cash and the importance of distinguishing years: cash represented about 14 percent of payments in 2024, while the income and age comparisons came from 2023 behavior reported in the 2024 Diary. Penny trays showed that consumers and retailers had already developed an informal response to penny inconvenience. Dimes offer better unit economics than pennies and nickels and are physically lighter than those coins, but a dime-only system would require ten-cent rounding, create denomination gaps, and impose larger adjustments on cash users. Watch for the President’s signature, the Federal Reserve’s 90-day plan, state guidance, retailer practices, coin orders, and evidence of shortages or consumer effects. The penny may be leaving the production line, but the policy experiment is only beginning. Sources and references for this discussion are available with the episode at Factolio.com.

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Sources and References

These sources supported the factual material used in this discussion. Factolio’s panel discussion is AI-generated from researched evidence and is written in original language.

1. Associated Press — Congress votes to end production of the penny after 234 years, sending a bill to Trump (NEWS)
2. U.S. Government Publishing Office — Congressional Record, House proceedings, September 14, 2026 — Common Cents Act (PRIMARY)
3. U.S. Senate Daily Press — Senate wrap-up listing H.R. 10167, Common Cents Act, passed by unanimous consent (PRIMARY)
4. U.S. Department of the Treasury — Penny Production Cessation FAQs (PRIMARY)
5. U.S. Mint — Penny FAQs (PRIMARY)
6. U.S. Mint — 2024 Annual Report (DATA)
7. U.S. Mint — United States Mint Hosts Historic Ceremonial Strike for Final Production of the Circulating One-Cent Coin (PRIMARY)
8. Federal Reserve Financial Services — Penny Order and Deposit Information (PRIMARY)
9. National Conference of State Legislatures — Elimination of the Penny: Cents-able Considerations (ANALYSIS)
10. U.S. Government Accountability Office — Future of the Penny: Options for Congressional Consideration (ANALYSIS)
11. Federal Reserve Financial Services — 2024 Diary of Consumer Payment Choice (DATA)
12. Federal Reserve Bank of Atlanta — 2024 Survey and Diary of Consumer Payment Choice: Summary Results (DATA)
13. Federal Deposit Insurance Corporation — 2023 FDIC National Survey of Unbanked and Underbanked Households (DATA)
14. U.S. Mint — 2025 Annual Report (DATA)
15. U.S. Mint — Coin Specifications (PRIMARY)
16. National Park Service — Common cents?: the role of pennies in the U.S. economy (ANALYSIS)
17. PCGS — Take A Penny, Leave a Penny – Want That Penny! (ANALYSIS)
18. Rutgers University — Stop making cents: What we lose with the end of the penny (ANALYSIS)