Elon Musk’s Department of Government Efficiency (DOGE) is eyeing ways to slash government spending. One of its first targets could be the penny.
DOGE, which officially became a part of the government on Tuesday after President Donald Trump signed an executive order, posted on X that producing the penny is costing American taxpayers tens of millions of dollars, suggesting that it may be one of the items it may consider eliminating.
Musk’s initiative, aimed at cutting $2 trillion in federal spending, didn’t directly state that the penny would be eliminated, but highlighted that it costs three times more to make than it’s actually worth.
According to the U.S. Mint, each penny cost 3.69 cents to produce in fiscal year 2024, costing taxpayers $119 million. This marked the 19th consecutive year in which production exceeded its face value.
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In the U.S., the penny was one of the first coins made by the U.S. Mint after its establishment in 1792. When it was first produced, the coin was larger and made of pure copper. Today’s smaller coin is made mostly of zinc, according to the U.S. Mint.
For comparison, the Canadian government eliminated the penny from its coinage system in 2012 because inflation eroded its purchasing power.
“Over time, the penny’s burden to the economy has grown relative to its value as a means of payment,” the government’s Economic Action Plan 2012 read.
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At the time, the penny only retained about one-twentieth of its original purchasing power.
“Given its declining purchasing value, some Canadians consider the penny more of a nuisance than a useful coin,” the report said.
The penny is just one of many items that DOGE may look to eliminate as it sets its sights on cutting $2 trillion in federal spending. However, Musk admitted in early January that DOGE may not reach its intended $2 trillion target.
“I think we’ll try for $2 trillion. I think that’s like the best-case outcome,” Musk told Stagwell Inc. CEO Mark Penn, adding that he believes if DOGE aims for $2 trillion in cuts, it has a “good shot at getting $1 [trillion].”
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