Two senators announce plan to eliminate penny, replace dollar bill with a coin

Another effort is underway to eliminate the penny and replace the dollar bill with a coin, reports WKYT.

On Wednesday, U.S. Senators John McCain and Mike Enzi announced the reintroduction of the Currency Optimization, Innovation, and National Savings Act of 2017, or the COINS Act for short.

According to a press release about the legislation, they said it would "modernize our currency by moving to a $1 dollar coin, reduce the cost of nickel production and suspend the minting of the penny, which currently costs more than one cent to produce."

The release also emphasized the estimated cost savings of the plan which have been projected to be as high as $16 billion.

The COINS Act had been introduced a few years ago by the two senators and others; it focused on replacing the $1 bill with a coin.

Although it is unclear why that legislation did not pass, the Wall Street Journal pointed out in 2013 that, according to the Federal Reserve, dollar coins were so unpopular that about $1.4 billion worth of them had been produced but were not being used.

A Fed official also suggested at the time that the switchover may not produce any cost savings at all due to increased expenses in other areas.

As for the penny, CNN Money reported last April that it costs 1.4 cents to make each one.

Despite the relatively low utilization rate, one group fighting to keep the penny—funded by the company that makes the metal sheets pennies are cut from—argues that the government will need to issue more nickels which it loses more on per coin—about 2.4 cents each.