Since the ratification of the United States Constitution in 1788, congress has interpreted their Article I, Section 8 right to coin money beyond this sentence. Since the Coinage Act of 1792, congress has been heavily involved in the design of US coinage even to the point of providing exact design details.
In recent years, it appears that congress that too worried about their legacy in US coinage than their legislative legacy. The modern problem began with the success of the 50 State Quarters program. While this was a novel idea that was worth doing, congress has destroyed the novelty by making the start of the 21st century the decade of the rotating design. In this decade, congress approved the Westward Journey Nickels, Presidential Dollar, DC and US Territories Quarters, Native American $1 Coins, Lincoln Bicentennial One Cent, and the America the Beautiful Quarters programs that will begin next year. Making matters worse, the dollar coin programs have mintage requirements that the US Mint has confirmed that there is a surplus of dollars that have not been sold to collectors or the Federal Reserve.
Commemorative coins have had mixed results. What numismatists call classic commemoratives suffered from issue overload where congress authorized commemorative coins to raise money for any pet project. When congress reauthorized commemorative coins for 1982, it appeared that they learned the lessons from past mistakes by limiting the number of programs authorized. That was until congress authorized programs with multiple coin options, like the 1989 Congress Bicentennial, 1991 Mount Rushmore Golden Anniversary, and 1992 XXV Olympiad commemoratives, causing collector fatigue in the market.
After commemorative programs started showing losses, the General Accounting Office (now called the Government Accountability Office) investigated how to fix the commemorative coin program. In GAO report GGD-96-113 [PDF], U.S. Mint: Commemorative Coins Could Be More Profitable, they noted failures in the commemorative coin programs were because of over production, bad choices of subject, and the production of too many commemoratives. Subsequently, congress authorized the 32-coin Atlanta Olympic Commemorative Coin Program that lost money for the US Mint. As a result, congress codified the recommended limits on commemoratives which they have held to ever since.
With complaints coming from many directions, congress has regularly abused its constitutional powers to the point that collectors are threatening to turn away from future US Mint’s offerings. This will hurt the future commemorative market as well as the dollar coin market since collectors are the majority purchasers of these coins.
It is time to reform the coinage laws.
Even though the constitution says that congress has the authority to coin money it does not say that they have to the ability to design money or run the US Mint. Since the Coinage Act of 1792, congress has transferred the operation of the US Mint to the executive branch. But for over 200 years, congress continues to try to run the Mint from the halls of the capital so that whenever congress has asserted itself in the coining process the results have lead to failure. It is time to remove congress from the process. Congress continues to have a role in defining the denominations, metal types, and other specifications (see 31 U.S.C. §5112(a) through (c)), but what goes on the coins, how they are made, and where they are made should be removed from congressional tinkering.
Over the next week, I will look at how to improve the administration of the coining process by breaking the discussion up into four categories: circulating coinage, bullion, commemorative coins, and medals. But first, we must reorganize the US Mint to become a better operating entity. The next article will look at a reorganization proposal.