End of an Era: Trump Administration Retires the Penny Amid National Shortages
President Donald Trump’s initiative to phase out the penny — once dismissed as a symbolic gesture — has rapidly reshaped the nation’s cash economy, leaving retailers, banks, and consumers grappling with the sudden absence of the one-cent coin.
The administration began winding down penny production earlier this year, framing it as a move toward fiscal efficiency. In February, Trump had declared his intention to “rip the waste out of our great [nation’s] budget, even if it’s a penny at a time.” That message set off a chain of actions at the Treasury Department and U.S. Mint, culminating in the official end of penny circulation this week.
On Wednesday, Treasury Secretary Scott Bessent will travel to the Philadelphia Mint to strike the final batch of one-cent coins for general use, bringing closure to a chapter in U.S. monetary history that began with the Coinage Act of 1792.
Although collectors will still be able to obtain special-edition pennies in small quantities, the Mint’s massive penny-making machinery — responsible for more than 3.2 billion coins in the last fiscal year — is now being retired. Yet, the process has underscored how deeply the penny remains ingrained in daily commerce. Transitioning away from a coin that’s been part of American life for over two centuries has proved anything but simple.
Retailers, grocers, and gas stations have been scrambling for months to adapt. By early September, reports of shortages were already mounting, and since Labor Day, the scarcity has intensified across the country. The Federal Reserve, which manages coin distribution, has temporarily halted penny orders at more than half of its regional distribution centers, with more expected to follow.
“People didn’t realize how quickly this was going to spread,” said Austen Jensen, senior executive vice president of the Retail Industry Leaders Association, which represents some of the nation’s largest retail chains.
Treasury officials are now weighing the release of guidance to help businesses adjust — including how to round cash prices and manage transactions without the one-cent coin. Still, many trade associations argue that a consistent, national policy is essential.
Groups representing retailers, restaurants, and banks are urging Congress to pass a federal law standardizing how cash transactions are rounded to the nearest nickel. Without such legislation, they warn, companies could face lawsuits under state consumer protection laws from customers claiming to have been shortchanged.
Efforts to pass that measure have been delayed by the ongoing government shutdown. Although a bipartisan bill establishing a national rounding rule cleared the House Financial Services Committee in July, it has not advanced to the full House, which was out of session for much of the fall.
Banks, too, are caught in the uncertainty. Steve Kenneally, senior vice president of payments at the American Bankers Association, said many financial institutions have been rounding check-cashing transactions in customers’ favor but need official guidance to avoid regulatory pitfalls. “We want to make sure banks don’t suffer any inadvertent regulatory mishaps, because we’re trying to do the right thing and round in favor of the customer,” he said. “We would like to have something, whether it’s from a regulator or legislation, that gives us guidance and that makes it a consistent customer experience everywhere. Having different businesses have different policies just doesn’t feel right.”
The American Bankers Association has also criticized the Federal Reserve’s decision to stop accepting penny deposits at many coin terminals, a policy that prevents banks with surplus coins from redistributing them efficiently. “This policy is accelerating the slowdown of penny circulation drastically,” the group warned in a recent letter to Treasury and the Fed.
A Federal Reserve spokesperson responded that “coin distribution locations accepting penny deposits and fulfilling orders will vary over time as localized inventory is depleted at certain coin distribution locations.”
According to Treasury estimates, ending the penny will save the government roughly $56 million each year. The U.S. Mint reports that manufacturing a single penny now costs 3.69 cents — more than triple its face value — due to rising metal and production costs. Officials concluded that “ongoing increases in production costs and the evolution in consumer habits and technology” have made the penny “financially untenable.”
Bessent’s move followed a formal finding that the one-cent coin was “no longer necessary to meet the needs of the United States,” a first in Treasury history.
While an estimated 300 billion pennies remain in circulation, the Treasury Department has clarified that all existing coins “remain legal tender and will retain [their] value indefinitely.” The penny, though no longer being minted, will continue to exist as a reminder of a bygone era in American currency — one that, for now, is ending a cent at a time.
{Matzav.com}
