From the U.S. Government Accountability Office, www.gao.gov Transcript for: Changes to Coins Could Save Money Description: GAO explores the possibilities if the U.S. Mint made changes to our coins Related GAO Work: GAO-19-300: U.S. Currency: Financial Benefit of Switching to a $1 Coin Is Unlikely, but Changing Coin Metal Content Could Result in Cost Savings Released: March 2019 [ Background Music ] [ Andrew Von Ah: ] There are certainly ways that we can more efficiently and effectively produce coins, and we believe the Mint should be given the authority to do that. [ Matt Oldham: ] Welcome to GAO's Watchdog Report, your source for news and information from the U.S. Government Accountability Office. I'm Matt Oldham. In 2017, the United States spent around $1.3 billion to make and circulate coins and paper money bound for use in the economy. I'm with Andrew Von Ah. He's a Physical Infrastructure director, and he led a GAO report looking into whether or not changes to how the U.S. Mint's coins makes sense. Apologies for the pun, and thank you for joining me, Andrew. [ Andrew Von Ah: ] Thank you for having me. [ Matt Oldham: ] One of the questions you looked at was, what happens if the U.S. replaces the $1 bill, formally known as the $1 note, with a $1 coin? And in the past, GAO has said that there are benefits. Are we saying the same thing today? [ Andrew Von Ah: ] We are not, in fact. While our prior work on this issue from 2012, estimated potential benefits of $4.4 billion over 30 years. Our current model is estimating potential losses of between $600 million and $2.6 billion over 30 years. And this is the first time our model is projecting out a loss. [ Matt Oldham: ] So what changed? [ Andrew Von Ah: ] Most significantly it's the lifespan of the note that's changed. Last time we looked at this, notes were lasting between four and five years, whereas now that number is closer to eight years. And that's really due to better processing of notes by the Mint, and less wear and tear on notes by users. [ Matt Oldham: ] So did you find other ways the Mint or the Bureau of Engraving and Printing could save money? [ Andrew Von Ah: ] We did. Our work also looked at coins. We looked at both the penny and the nickel because the cost to produce those coins is more than their face value. So we looked at potential savings from suspending production of the penny and found that there's the potential for something around $250 million worth of savings over the next 10 years or so. With regard to the nickel and the other coins, changing the mixture of metals that make up those coins can result in savings--I think we found something around $100 million over the next 10 years looking across the nickel, the dime, and the quarter, if they were to change some of the metal composition of those coins, which would have no impact on the weight or feel of the coins or their electromagnetic signature. [ Background Music ] [ Matt Oldham: ] So GAO is saying it could cost the government more money to replace dollar bills with dollar coins. And changing the metal composition in the other coins could bring some savings. Andrew, who or what could these changes affect? [ Andrew Von Ah: ] So for changing the metal composition, there would really essentially be no impact on the public. They would sort of see, it would be a very seamless change. Again, eliminating the penny could have a number of different impacts. There could be penny shortages, and so those are some of the things that we discussed in our report. [ Matt Oldham: ] Okay, so what recommendations did your team have from this report? [ Andrew Von Ah: ] Well, to change the metal composition of any of these coins essentially requires an act of Congress. These are, the metal composition is statutorily determined, and so our recommendation was for Congress to consider allowing the Mint or giving the Mint the authority to change the metal composition of those coins without such an act of Congress and essentially giving them the authority to do it on their own, so long as there was no change to the weight or feel of the coin or the electromagnetic signature so that it really had no impact on its use. [ Matt Oldham: ] And finally, what do you believe is the bottom line of this report? [ Andrew Von Ah: ] The bottom line is essentially that we don't really see any savings from eliminating the dollar note. There's certainly some issues with eliminating the penny that would need to be worked through should we decide to pursue that. But there are certainly ways that we can more efficiently and effectively produce coins, and we believe the Mint should be given the authority to do that. [ Matt Oldham: ] Andrew Von Ah led a GAO report looking at what could happen if changes were made to our coins. Thank you for your time, Andrew. [ Andrew Von Ah: ] Thank you. Appreciate it. [ Background Music ] [ Matt Oldham: ] And thank you for listening to the Watchdog Report. To hear more podcasts, subscribe to us on Apple Podcasts. [ Background Music ] [ Matt Oldham: ] For more from the congressional watchdog, the U.S. Government Accountability Office, visit us at gao.gov.