Jan 6, 2013 | bullion, coins, commentary, Eagles, gold, legal, platinum, policy
Obverse of the 2012 American Eagle Platinum Proof
Regardless of the side of the political spectrum you are in this topic, it will not work.
The United States Code (U.S.C.) is the codification of the laws of the United States. It is divided into 51 titles each covering one general topic. References to the law are made by providing the title number, followed by “U.S.C.,” then the section of the law. Subsections are added using parentheses after the section. All of the laws governing the U.S. Mint are under Title 31. When talking about what coins the U.S. Mint may be allowed to strike, you would find those laws in Title 31 Section 5112 (
31 U.S.C. §5112).
First question is whether it is legal for the U.S. Mint to strike the $1 Trillion coin. Although there are as many answers as there are pundits, everyone points Title 31, Section 5112, paragraph “k” (31 U.S.C. § 5112(k)) that reads as follows:
The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.
This law was passed by congress under their authority in Article 1, Section 8 of the U.S. Constitution that says “The Congress shall have Power… To coin Money, regulate the Value thereof, ….” The law’s intent was to give the U.S. Mint the authority to issue the American Eagle Platinum Bullion and Platinum Proof coins. American Eagle Platinum coins have a $100 face value and sell for a premium over the market price of platinum and taking into consideration coin’s production cost. However, the law does not restrict the issuance of the platinum coin to the American Eagle program.
But is it constitutional? The argument from John Carney of CNBC says it is not by twisting a ruling by the Supreme Court. Carney cites the case Whitman v. American Trucking Assns., Inc. (531 U.S. 457 (2001)) in saying that “the Environmental Protection Agency rule making authority was too broad because Congress had failed to provide ‘intelligible principle’ to guide the agency.” Unfortunately, like a lot of people, Carney reads the headlines and not the majority opinion. In the majority opinion, Justice Antonin Scalia wrote the law “does not permit the Administrator [of the EPA] to consider implementation costs” which is against previous precedent because the Clean Air Act, which was under question, “often expressly grants the EPA the authority to consider implementation costs, a provision for costs will not be inferred from its ambiguous provision.”
In other words, the Supreme Court said that because there are conflicts in the law. The “intelligible principle” is that Congress cannot delegate partial authority over one part of a law where other parts have a requirement to consider other circumstances. In other words, the Supreme Court is saying that Congress has to be consistent in delegating its authority.
Could 31 U.S.C. § 5112(k) be interpreted in the same manner? It is possible for the Supreme Court to declare the law unconstitutional, but if they do so they would also have to rule that the law that allowed the U.S. Mint to create the 2009 Ultra High Relief Gold Coin unconstitutional. According to 31 U.S.C. § 5112(i)(4)(C):
… at the same time the Secretary in minting and issuing other bullion and proof gold coins under this subsection in accordance with such program procedures and coin specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.
Under both 31 U.S.C. § 5112(k) and 31 U.S.C. § 5112(i)(4)(C), the Secretary can authorize the U.S. Mint to strike any denomination platinum or gold coin with the value of $1 Trillion. Since there is no ambiguity or contradictions that would be able to use Whitman v. American Trucking Assns. as a precedence, the constitutionality should not be in question.
If the Secretary could mint and issue a $1 Trillion coin, then the Secretary could mint 17 such coins that could theoretically be used to pay off the country’s debt and give the country a positive balance for the first (and only) time since 1835 under President Andrew Jackson.
For discussion sake, let us say that the Secretary authorized the U.S. Mint to produce a $1 Trillion coin. Who is going to buy the coin?
If the concept is to use the profit (seigniorage) from the sale of the coin, whether it is made of gold or platinum, the coin has to be sold in order for there to be a profit. If the government would just deposit a $1 Trillion coin in the Federal Reserve, then where is the profit for the government? In order for a coin to become legal tender, it has to be bought from the government for at least its face value unless the law allows otherwise (see the American Eagle Bullion program and any of the commemorative programs). The U.S. Mint does not consider a coin to be legal tender until it receives an appropriate deposit of bullion or other forms of legal tender.
It this concept of legal tender that has been behind the government’s position that because the 1933 Saint-Gaudens Double Eagle coin was not paid for by a depositor (part of which is required in 31 U.S.C. § 5122), they are government owned coins (31 U.S.C. § 5121) and not legal tender. This concept has been upheld in the history of the 1933 Saint-Gaudens Double Eagles including the settlement over the Fenton-Farouk coin that sold for $7,590,020 with $20 going to “monetize” the coin.
Most recently, Judge Legrome D. Davis (U.S. District Court for Eastern Pennsylvania) confirmed the legal tender status of the 10 Double Eagles that Joan Langbord allegedly found in a box once owned by her father, infamous Philadelphia jeweler Israel Switt who is considered one of the central figures in the coins removal from the U.S. Mint. In Lanbord et al v. U.S. Treasury (Civil Action No. 06-5315), Judge Davis’s opinion cites past cases including the government’s own case against Israel Switt in 1934 for not forfeiting recalled gold and the previous return of 75 coins attributed to him. His opinion effectively confirms the U.S. Mint’s argument that once it creates a coin it is not legal tender and a liability on their balance sheet until the coins is bought.
If the coin is has to be paid for by a depositor before it can become legal tender, who will buy a $1 Trillion coin?
If the coin is just deposited with the Federal Reserve, there will be a $1 Trillion liability on the government’s balance sheet. In order to make the books balance, the Department of Treasury would have to sell debt bonds to make up the difference and that would add $1 Trillion to the national debt.
If the coin is bought by the Federal Reserve, then the Fed will have to pay $1 Trillion to the U.S. Mint for the coin reducing its overall working capital by $1 Trillion. Paying for a $1 Trillion that could not be used will just transfer the debt from the general treasury to the Federal Reserve. Since the Federal Reserve is in charge of managing the country’s money supply, the net effect will be to reduce the money supply by $1 Trillion that will cause the economy to shrink—any time you artificially remove money from the economy it will shrink which will also weaken the buying power of the U.S. dollar.
Transferring the debt away from the general fund might look good on paper but the effect will shrink the economy and cause more problems than even considering the constitutionality of doing this.
Unfortunately, this scheme was conjured by someone who did not think through the idea thoroughly.
Coin image courtesy of the U.S. Mint.
Jan 3, 2013 | coins, commemorative, legislative, policy
Public Law No. 112-201: Mark Twain Commemorative Coin Act
To require the Secretary of the Treasury to mint coins in commemoration of Mark Twain.
Sponsor: Rep. Blaine Luetkemeyer (R-MO)
• Signed by the President on December 28, 2012
See this bill at http://www.govtrack.us/congress/bills/112/hr2453
Public Law No. 112-209: March of Dimes Commemorative Coin Act of 2012
To require the Secretary of the Treasury to mint coins in recognition and celebration of the 75th anniversary of the establishment of the March of Dimes Foundation.
Sponsor: Rep. Bob Dold (R-IL)
• Passed the Senate on December 10, 2012
• Signed by the President on December 18, 2012
See this bill at http://www.govtrack.us/congress/bills/112/hr3187
The 112th Congress formally adjourned just after 12:30 P.M. on January 2, 2013 as one of the least productive in decades. It has been reported that this congress passed 219 bills as compared to 383 bills passed by the 111th congress and 460 by the 110th congress. As a comparison, the 80th congress (1947-48) that President Harry Truman labeled the “Do-nothing Congress” passed 906 bills.
Dec 27, 2012 | base metals, BEP, bicentennial, bullion, coins, commemorative, copper, currency, dollar, Euro, Federal Reserve, First Spouse, gold, halves, legislative, nclt, news, nickels, policy, silver, US Mint
We end numismatic 2012 almost the same way as we began, discussing what to do about the one-dollar coins. The over production lead to a quite a number of bills introduced in congress to try to fix the perceived problem but none ever made it to a hearing, let alone out of a hearing. Rather, the U.S. Mint hired Current Technologies Corp. (CTC) to perform an alternative metals study required by congress.
When the U.S. Mint finally published the report and a summary they made a recommendation to study the problems further because they could not find suitable alternatives to the current alloys used. While reading the summary gives the impression that the request is reasonable, the full 400-page report describes the extensive testing and analysis that the U.S. Mint and CTC performed leaving the reader curious as to why they were unable to come to some sort of conclusion—except that there is no “perfect” solution. This is a story that will continue into 2013 and be on the agenda for the 113th congress when it is seated on January 3, 2013.
The other part of the discussion is whether or not to end the production of the one-dollar Federal Reserve Note. It was the last hearing before the House Financial Services subcommittee on Domestic Monetary Policy and Technology for Rep. Ron Paul (R-TX) and the 112th congress that will certainly carry over into 2013.
This does not mean the Bureau of Engraving and Printing is without its controversy. In order to comply with the court order as part of American Council for the Blind v. Paulson (No. 07-5063; D.C. Cir. May 20, 2008 [PDF]) and the subsequent injunction (No. 02-0864 (JR); D.C. Cir. October 3, 2008 [PDF]), the BEP has been working to provide “Meaningful Access” to United States currency.
Secretary of the Treasury Timothy F. Geithner approved the methods that will be used to assist the blind and visually impaired to U.S. currency on May 31, 2011. In addition to examining tactile features, high contrast printing, and currency readers, the BEP issued a Request for Information for additional information to implement their plan. The BEP will be participating at stakeholder organization meetings to socialize and refine their plans. There will probably be few announcements before the conventions of the National Federation of the Blind and American Council of the Blind this summer.
Another building controversy from the BEP is whether the redesigned $100 notes will find its way into circulation. Introduced in April 2010, full production has been delayed because of folding during the printing process. The situation has to be so severe that the BEP has not announced a new release date and delayed releasing the 2011 CFO Report [PDF] to the end of Fiscal Year 2012 while finding a way to bury the scope and costs of the delays. Will the redesigned $100 Federal Reserve Note be issued in 2013? Stay tuned!
Staying with currency issues, there should be a new series of notes when a new Secretary of the Treasury is appointed. It is known that the current Secretary Timothy F. Geithner wants to pursue other options. If the BEP follows its past practice, notes with the new Secretary of the Treasury’s signature would be Series 2009A notes. There have been no reports as to whether Treasurer Rosie Rios will continue in her position.
As for other products, the BEP will continue to issue specially packaged notes using serial numbers that are either lucky numbers (i.e., “777”) or ones that begin with “2013” as part of their premium products. Of course they will continue to issue their sets of uncut currency.
Another carry over from 2012 will be whether the U.S. Mint will issue palladium coins that were authorized by the American Eagle Palladium Bullion Coin Act of 2010 (Public Law No: 111-303 [Text] [PDF]). The law requires that the U.S. Mint study of the viability of issuing palladium bullion coins under the Act. That report was due to congress on December 14, 2012 but has not been made public at this time.
Bibiana Boerio was nominated to be the Director of the U.S. Mint.
Other than the higher prices for silver products, the U.S. Mint should not generate controversies for its 2013 coin offerings. There will be no changes for the cent, nickel, dime, and half dollar with the half dollar only being struck for collectors since it has not been needed for circulation since 2002. These coins will be seen in uncirculated and proof sets with silver versions for the silver sets.
For the sets with the changing designs, the reverse of the 2013 America the Beautiful Quarters Program will honor:
There has been no confirmation from the U.S. Mint whether they will strike San Francisco “S” Mint quarters for the collector community as they did in 2012.
The 2013 Presidential $1 Coins ends the 19th century and begins the 20th century with some of the more interesting Presidents of the United States in history:
If we honor the Presidents we have to honor their spouses. In 2013, the First Spouse Gold Coins will honor:
- Ida McKinley
- Edith Roosevelt
- Helen Taft
- Ellen Wilson (died 1914)
- Edith Wilson (married Woodrow Wilson 1915)
The U.S. Mint has not released designs for these coins at the time of this writing.
2013 Native American Dollar Reverse Design
Congress has authorized two commemorative coin programs for 2013:
American Eagle coin programs will continue with the bullion, collector uncirculated, and proof coins for both the silver and gold. The American Eagle Platinum bullion coin will continue to use its regular reverse while the American Eagle Platinum Proof will continue with the Preamble Series. The Preamble Series is a six year program to commemorate the core concepts of the American democracy as outline in the preamble of the U.S. constitution. For 2013, the reverse will be emblematic of the principle “To Promote the General Welfare.” The U.S. Mint has not issued a design at this time.
Currently, there are no announced special products or sets using American Eagle coins and no announced plan for special strikings such as reverse proofs or “S” mint marks.
Finally, we cannot forget the American Buffalo 24-Karat Gold Coins that will be available as an uncirculated coin for the bullion/investor market and a proof coin for collectors.
And I bet you thought that 2013 would be a mundane numismatic year!
Dec 2, 2012 | coins, commemorative, legislative, policy
H.R. 2453: Mark Twain Commemorative Coin Act
Sponsor: Rep. Blaine Luetkemeyer (R-MO)
To require the Secretary of the Treasury to mint coins in commemoration of Mark Twain.
This bill was passed by the Senate and enrolled on 11/15/12.
Presented to the President for his signature on 11/28/12.
See this bill at http://www.govtrack.us/congress/bills/112/hr2453
Nov 30, 2012 | Canada, coins, dollar, legislative, policy, US Mint
GAO AGAIN RECOMMENDS MOVE TO DOLLAR COIN
Congressional Committee Discusses Budget Savings Benefit Of Dollar Coin
900 19th St. NW 8th Floor
Washington, DC 20006
The independent, non-partisan Government Accountability Office (GAO) has now recommended a move to the dollar coin eight times to Congress. They have estimated that the federal government could save at least $4.4 billion, if not more, without raising a single tax or cutting a single program.
“GAO stands for accountability, reliability and independence,” Philip Diehl, former Director of the U.S. Mint testified, “Since 1990, GAO has issued seven reports, all reaching the same conclusion: billions will be saved. The estimated savings over 30 years have ranged from $4.4 billion to $15.7 billion. It didn’t matter whether a Republican or Democrat asked the question, the answer always came back the same.”
“We continue to believe that replacing the note with a coin is likely to provide a financial benefit to the government if the note is eliminated and negative public reaction is effectively managed through stakeholder outreach and public education,” said Lorelei St. James, who testified on behalf of the GAO. “Many other countries have successfully replaced low denomination notes with coins, even when initially faced with public opposition.”
In addition to testimony from the GAO and the former Director of the U.S. Mint, the House Financial Services subcommittee on Domestic Monetary Policy and Technology heard from the Royal Canadian Mint and others. Canada transitioned to a dollar coin in 1987 and realized ten times the budget savings initially estimated.
“Canada’s replacement of the one-dollar bank note with a circulation coin, and later the introduction of the two-dollar coin, can be deemed a success, from the perspective of the Mint and all end-users of Canadian currency,” noted Beverley Lepine, Chief Operating Officer of the Royal Canadian Mint.
Today’s hearing was chaired by Congressman David Schweikert (R-AZ-5), cosponsor of the Currency Optimization, Innovation and National Savings (COINS) Act (H.R. 2977) and comes at a time when Congress is considering options for avoiding the fiscal cliff and addressing the federal budget deficit.
The COINS Act (H.R. 2977 and S. 2049) was introduced earlier this year by a bipartisan group including Congressman Schweikert, Senators Tom Harkin (D-IA), John McCain (R-AZ), Tom Coburn (R-OK), Mike Enzi (R-WY) and is designed to save the country billions of dollars by eliminating the wasteful, inefficient $1 note.
Testimony from today’s witnesses can be found at www.dollarcoinalliance.org.
About Dollar Coin Alliance
The Dollar Coin Alliance is a coalition of small businesses, budget watchdogs, transit agencies, and labor groups dedicated to saving American taxpayers billions of dollars by transitioning to a one-dollar coin, and focused on educating taxpayers and policy-makers about the benefits of increasing dollar coin circulation. For more information, or to get involved, please visit www.DollarCoinAlliance.org.
CREDITS: Press release from Dollar Coin Alliance. Edited to add hyperlinks.
Nov 20, 2012 | coins, commemorative, legal, legislative, palladium, policy, US Mint
On November 6, two weeks ago, the United States held an election and it resulted in basically no change in the political structure. President Barack Obama was re-elected, the House of Representatives is still being lead by the Republicans and the Senate by the Democrats. Leadership in both chambers should not change.
For numismatists, there will be one change in the 113th Congress with the retirement of Ron Paul (R-TX) who is currently Chairman of the Financial Services Subcommittee on Domestic Monetary Policy and Technology, the subcommittee that oversees the U.S. Mint. There will also be a change on the leadership of the Financial Services Committee itself with the retirement of Barney Frank (D-MA), the Democrats will have to select a ranking member. There is no speculation as to who will replace these two retiring representatives.
In retrospect, after worrying about Paul becoming chairman of this subcommittee, the Financial Services Committee was able to maneuver around Paul’s usual intransigence by taking on legislation at the committee level rather than rely on the vetting of the subcommittee. In fact, because of Paul’s attempted run for the presidency, his absence made it easy for the committee to bypass his subcommittee.
There is still work for the 112th congress to do aside from the “fiscal cliff” and sequestration. H.R. 5977, the Collectible Coin Protection Act, still needs to be acted upon. The Collectible Coin Protection Act will allow collectors, dealers, and grading services to bring legal actions that are much more effective, with much stronger remedies than previously existed. It will allow those harmed to work with the Justice Department to bring criminal actions, where appropriate.
Now that congress is in their lame duck session, the only way H.R. 5977 can become law, is to have it considered under suspension of the rules and force an up or down vote. In order for the bill to be considered under suspension of the rules will be to have members of congress co-sponsor the legislation. At the time of this writing, there are 11 co-sponsors from both sides of the aisle. I urge all of my readers to support H.R. 5977 by asking their representative to co-sponsor H.R. 5977. If you can help, read the information I wrote for the posting “ANACS Revelation Shows We Continue to Have Counterfeit Problems” that describes how to contact your member of congress.
Bibiana Boerio was nominate to be the Director of the U.S. Mint.
An issue that will probably be deferred to the 113th congress will be the report to congress that is required under the Coin Modernization, Oversight, and Continuity Act of 2010, (Public Law No: 111-302 [Text] [PDF]). The law requires the U.S. Mint to produce a report about the metals used for coinage and alternatives two years from enactment. Since the law was signed by the president on December 14, 2010, the U.S. Mint is required to submit their report by December 14, 2012.
Adolph A. Weinman’s Winged Liberty Head “Mercury” Dime effigy to be used on the new palladium bullion coin.
Although there is no report from the U.S. Mint as to the status of either report, it would be reasonably certain that the U.S. Mint will submit both reports by December 14. However, it would also be reasonably certain that the House Financial Services Subcommittee on Domestic Monetary Policy and Technology will leave it for the next congress’s agenda.
Nov 2, 2012 | coins, commemorative, legislative, policy
Public Law 112-181: Lions Clubs International Century of Service Commemorative Coin Act
Sponsor: Rep. Peter Roskam (R-IL)
Signed by the President on October 5, 2012
See this bill at http://www.govtrack.us/congress/bills/112/hr2139
H.R. 6571: Korean Immigration Commemorative Coin Act
Sponsor: Rep. Robert Andrews (D-NJ)
To require the Secretary of the Treasury to mint coins in commemoration of the 100th anniversary of the beginning of Korean immigration into the United States.
Introduced and referred to the House Committee on Financial Services 10/12/12
Track this bill at: http://www.govtrack.us/congress/bills/112/hr6571
Oct 4, 2012 | Australia, BEP, currency, Federal Reserve, policy
Last year I asked why the United States would not consider using polymer notes after the Bank of Canada made their announcement that they will transition to using the polymer substrate. Not only are polymer notes very difficult to counterfeit, they last longer reducing printing costs and overhead to both the Bureau of Engraving and Printing and the Federal Reserve.
The
Spink Auction was held on October 2, 2012 in their London offices. None of the nine Canadian test notes printed on DuraNote were sold.
After it was announced that Spink of London will auction sheets of DuraNote trial printings from the Bank of Canada, BEP told CoinWorld that they printed as many as 40,000 sheets of Federal Reserve Notes using the DuraNote substrate.
DuraNote was a product of Mobil Chemical and AGRA Vadeko of Canada. Trials of DuraNote were not successful and the project was abandoned. Patents for DuraNote were sold following the Exxon-Mobil merger.
Around the same time, the Reserve Bank of Australia (RBA) developed a polymer substrate with a different formula that went into production in 1992. Since then, Australia has been successfully printing polymer notes.
In the mean time, there continues to be issues with folding of the paper specially designed for the new $100 Federal Reserve Note. Since the October 1, 2010 announcement by the Fed of the folding issue, the Fed and BEP has less than forthcoming on the status of the new note including the BEP withholding their annual report for fiscal year 2011 so they do not have to disclose how many of these notes they have in inventory.
The paper being used by the BEP is manufactured by Crane & Company who has had the exclusive contract with the BEP since 1879.
Where DuraNote failed RBA succeeded in creating a workable technology that is being adopted world wide. With the new $100 note having printing problems, why has the BEP not looked into the RBA polymer substrate for U.S. currency? Why does the Federal Reserve, BEP, and Secret Service cling to 19th and 20th century printing technologies in the 21st century? Or is this a matter of the influence being purchased [PDF] by Crane & Company in order to maintain its monopoly.
Maybe it is time for the Fed and the BEP to re-examine their commitment to paper and stop wasting time and money with failed technologies.
Oct 3, 2012 | coins, commemorative, legislative, policy
The following is a summary of the coin-related legislation whose status was changed in September 2012:
H.R. 2139: Lions Clubs International Century of Service Commemorative Coin Act
Sponsor: Rep. Peter Roskam (R-IL)
Passed the House On Motion to Suspend the Rules and Pass, as Amended 9/10/12
Passed the Senate by unanimous consent 9/22/12
Presented to the President 9/25/12
Track this bill at: http://www.govtrack.us/congress/bills/112/hr2139
H.R. 2453: Mark Twain Commemorative Coin Act
Sponsor: Rep. Blaine Luetkemeyer (R-MO)
Passed the Senate with amendments by unanimous consent 9/22/12
Message on Senate action sent to the House 9/24/12
Track this bill at: http://www.govtrack.us/congress/bills/112/hr2453
S. 3612: Commemorative Coins Reform Act of 2012
Sponsor: Sen. Jim DeMint (R-SC)
A bill to prohibit the payment of surcharges for commemorative coin programs to private organizations or entities.
Introduced and referred to the Committee on Banking, Housing, and Urban Affairs 9/21/12
Track this bill at: http://www.govtrack.us/congress/bills/112/s3612
Sep 28, 2012 | BEP, coins, currency, economy, Federal Reserve, legislative, policy, US Mint
Those of us here in the Washington, DC area who work with or for the Federal Government knows that this week is the home stretch to the end of the fiscal year. Many of us who work for the government are not directly involved with the political infighting that makes the national news. Federal employees are prohibited to be involved with politics by law and contractors usually have employer policies that limit their political activities.
One thing we worry about is the funding issues that have not been resolved. Although the news reported that congress has passed a continuing resolution to fund the government for six months, what the reports did not say is that the continuing funding are only at the levels negotiated last year which rolled back funding to Fiscal Year 2007 (FY07) levels. FY07 dollars do not have the same buying power as today’s dollars and the amount of work required by the laws passed by congress have increased.
You might have heard about the budget “sequestration.” Sequestration is the mechanism that was instituted as part of the Budget Control Act of 2011 to force congress to negotiate a budget or automatic, across the board cuts totaling $1.2 trillion will go into effect on January 1, 2013. Sequestration has made a lot of people in the DC area nervous because it will cause contractors to cut jobs. In fact, with the uncertainty of sequestration, large contractors, like Lockheed-Martin, are providing 90 day layoff notices they are required to give employees when defense and other security-related contracts are ended early.
For the money manufacturing operations under the Department of the Treasury, there should not be any problems from sequestration because the U.S. Mint and the Bureau of Engraving and Printing are profitable agencies that uses their profits for operations. If there are shortfalls in providing funding for operations, the Secretary of the Treasury is allowed to withdraw funds from the Public Enterprise Funds (the accounts where the profits are deposited).
Problems remain for both agencies. The most significant of the issues are the problems with printing the new $100 Federal Reserve Notes. BEP continues to report that the new notes have folding issues that have delayed their release for two years. Inquiries by numismatic industry news outlets have reported that the problems are still under investigation and that no new release date has been set.
The U.S. Mint recently reported striking problems with the First Spouse Gold Coins. Apparently, the design caused metal flow problems in trial strikes that caused delays in releasing the coins. While the U.S. Mint has said they rectified the problems, the coins have not been issued.
In addition to the coining problems, the U.S. Mint also suspended its attempt to update its technology infrastructure. After receiving the responses from a formal Request For Information (RFI), the U.S. Mint pulled back on its attempt to update its infrastructure and online ordering services to re-examine the requirements and the business processes that would be part of that contract. The U.S. Mint press office said that they had no further information other than what has been published. They did confirm that the RFI responses will not be released because they contain proprietary information that is protected from public release.
It is difficult to know whether the federal budget situation will effect the U.S. Mint and BEP or whether the attempt to reduce costs in order to ensure they do not access more money from their respective Public Enterprise Funds. This is because money in excess of budgeted operations plus a reserve must be withdrawn from these Public Enterprise Funds and deposited in to the general treasury accounts at the discretion of the Secretary of the Treasury (31 U.S.C. § 5136 for the U.S. Mint and 31 U.S.C. § 5142 for the BEP). It is reasonable to question the management of these funds in the light of the federal budget situation.
Right now, the way the BEP and the Federal Reserve has handled the situation with the new $100 note suggests there is more to that issue than meets the eye. Nether the BEP or the Fed are answering question and the BEP did not issue an annual report for 2011 which would have to report on the production of the $100 notes. Inquiries to the BEP were returned with a reply that the report “is not ready.”
The annual reports for both these bureaus will make for interesting reading, if the BEP produces one for 2012.
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