In a move that made the numismatic world notice, Rep. David Schweikert (R-AZ) introduced H.R. 2977, the Currency Optimization, Innovation, and National Savings Act (COINS Act). In short, the purpose of this bill is to transition the U.S. economy to using dollar coins. The bill is cosponsored by Reps. Jeb Hensarling (R-TX), Blaine Luetkemeyer (R-MO), Jim Renacci (R-OH), and Pat Tiberi (R-OH).
First provision of the bill is to remove the Susan B. Anthony Dollar from circulation. Under this provision, when a bank receives an Anthony Dollar, it is returned to the Federal Reserve and removed from circulation. The Federal Reserve then can sell the coins to dealers or to countries who are using the U.S. dollar as its primary currency. Removing the Anthony dollar from circulation will prevent the confusion between the golden colored dollars that would be in circulation. As part of this section of the bill, there are quarterly reporting requirements to congress that documents the progress of this bill.
As part of this first provision, the bill makes a subtle change to Section 5112(p)(2) of title 31, United States Code (31 U.S.C. 5112(p)(2)) to make the Board of Governors of the Federal Reserve a partner in the publicity of using the dollar coin. After all, the coins are being stored in their facility and it is in their best interest to have them circulated.
But the key provision of the bill is in Section 3 that outlines the transition to the use of dollar coins. At the beginning, the section makes it clear that purpose of the bill is to create a transition environment so that the coin replaces the paper note:
If this bill passes, Federal Reserve banks may continue to place into circulation $1 Federal Reserve notes until the number of dollar coins placed into circulation exceeds 600 million annually or four years after the bill is enacted, which ever comes first. During this transition phase, Federal Reserve banks cannot order new paper notes but may continue to circulate notes on hand. They are also to continue to follow their unfit currency policies by removing notes that are torn or otherwise unfit for circulation. These notes will be replaced by coins.
After the introduction of H.R. 2977, Sens. Scott Brown (R-MA) and John Kerry (D-MA) introduced S. 1624, the Currency Efficiency Act of 2011 to place a “restriction on overproduction of $1 coins.” However, this is seen as the Massachusetts senators sponsoring a bill in an attempt to protect a constituent, Crane & Co., the exclusive supplier of currency paper to the Bureau of Engraving and Printing.
H.R. 2977 appears to be the first bill introduced that creates a transition plan rather than advocating an abrupt end to the paper note. Considering the emotional response when people are polled, a four year transition is a good idea. It will give people a chance to get used to the coins while both circulate together. But if it passes, I will make the immediate transition and exclusively use coins.
If you agree with the COINS Act, and I hope you do, contact your representative to express your support for H.R. 2977. If you want a few talking points, you can say:
- The GAO reports that switching from paper to coins will save the government approximately $5.5 billion over 30 years
- If voted into law, this bill will reduce the $1.1 billion stockpile of coins in the Federal Reserve coin rooms. In this economy, adding $1.1 billion to the economy is better than having it sitting on the shelf.
- It will allow the United States to join the rest of the industrialized world, including the United Kingdom and the Eurozone whose currencies are worth more than ours, whose unit currency is represented as a coin
You can find out how to contact your representative at the House of Representatives website at house.gov.