Elon Musk's DOGE Targets the Penny Mark

Elon Musk’s Department of Government Efficiency has set its sights on reducing costs by targeting the US penny. In the Twitter substitute X, DOGE said it would cost more than 3 cents for the Mint to make a penny, forcing US taxpayers to cough up $179 million in the fiscal year of 2023. "The Mint produced more than 4.5 billion pennies in FY2023, accounting for about 40% of the 11.4 billion coins produced for circulation," the post noted.

The US Mint distributed around 4.1 billion pennies in 2023. The cost of producing and distributing a penny rose to about 3.7 cents, up over 20% from last year, the US Mint said in its fiscal year 2024 annual report. Contributing to the higher price are climbing costs for metals like zinc and copper.

Musk isn't proposing something new. For decades, advocates have argued that the penny should be abolished because it's rarely used in commerce. In the aftermath of the Covid-19 pandemic, more and more consumers are buying online or avoiding cash at all costs.

Over two decades ago, in a 2001 episode of "The West Wing," the fictional character Sam Seaborn delivered a passionate rant about the penny.

“Majority of pennies don’t circulate. They go in jars, sock drawers,” Seaborn said.

More recently, a New York Times Magazine article last year made the case for abolishing the penny.

“The necessity of abolishing the penny has been obvious to those in power for so long that the inability to accomplish it has transformed the coin into a symbol of deeper rot,” the piece noted.

Some experts argue that removing the penny could save businesses significant time for cashiers. Jeff Lenard, vice president of strategic industry initiatives at the National Association of Convenience Stores, noted that approximately 52 million in-person cash transactions take place daily at convenience stores.

“If we save every one of these customers 2 seconds, that’s 104 million seconds or 1,203 days,” Lenard previously said to CNN. “And that doesn’t factor in time compounding — saving 2 seconds for the other people waiting in line before they get to pay. That’s some serious productivity.”

Musk has played a key role in the new Trump administration. President Donald Trump officially created the Department of Government Efficiency through an executive action this week. According to the Wall Street Journal, Vivek Ramaswamy, initially appointed to co-run the department with Musk, has been ousted.