### U.S. Treasury to Cease Penny Production, Citing High Costs

The U.S. Treasury Department has announced plans to discontinue the production of new pennies starting early next year, following President Donald Trump's directive to halt the coin's production. The decision marks the end of the penny's over 230-year history in American currency and aims to address the coin's rising production costs, which have more than doubled its face value.

The Treasury confirmed that the U.S. Mint, which is responsible for producing American coins, will cease to manufacture new pennies once the current stock of blank templates is exhausted. The final order for penny blanks has already been placed, signaling the imminent end of penny production. This move, first reported by the Wall Street Journal, is expected to save an estimated $56 million annually in material costs, according to the Treasury.

In a statement earlier this year, President Trump criticized the ongoing production of the penny, labeling it as "wasteful" due to the manufacturing costs exceeding the coin's face value. He asserted that the United States has been incurring unnecessary expenses in minting pennies, which cost more than 2 cents each to produce. Treasury statistics revealed that the cost of producing a single penny has increased from 1.3 cents to 3.69 cents over the past decade.

Comparatively, it is cheaper to produce a $1 bill than a penny. The Bureau of Engraving and Printing, under the Federal Reserve, estimates the cost of printing a $1 note at 3.2 cents. In fiscal year 2024, the U.S. Mint reported an $85.3 million loss from penny production.

Abraham Lincoln's portrait has graced the penny for 116 years, and the coin itself has been part of American culture since 1792. Currently, there are approximately 114 billion pennies in circulation, which the Treasury Department states are underutilized.

The decision to retire the penny, while significant, typically requires congressional approval. However, legal experts such as Laurence H. Tribe from Harvard Law School argue that Treasury Secretary Scott Bessent has the authority to discontinue the coin under existing U.S. Code.

The penny will join other retired currency denominations such as the half-cent coin and the 20-cent piece. Despite the Treasury's cost-saving intentions, some, like Mark Weller, executive director of Americans for Common Cents, argue that eliminating the penny could lead to unintended economic consequences. Weller suggests that increased nickel production, which costs nearly 14 cents per coin, would offset any savings from halting penny production.

Weller further argues that getting rid of the penny might result in price rounding that could affect consumers negatively, particularly those who rely on cash transactions. Despite the rise of digital payments, cash remains essential for many, especially the economically underserved.

According to the U.S. Mint's annual report, 3.2 billion pennies were produced in fiscal year 2024. Caroline Turco from the Money Museum points out that the U.S. technically only has "cents" and not "pennies," highlighting a common misconception in American vernacular.

In summary, while the Treasury Department's decision aims to reduce waste and save costs, the move has sparked a debate on the practical and financial implications of phasing out the penny.