Elon Musk’s Department of Government Efficiency (DOGE) has found its next cost-cutting mission: the American penny. In a recent post on X (formerly Twitter), DOGE highlighted the shocking cost of producing pennies, which now exceeds their actual value.
According to the report, it costs the United States over three cents to mint each penny, despite its face value being just one cent. In 2023 alone, the U.S. Mint spent $179 million to produce more than 4.5 billion pennies.
The penny costs over 3 cents to make and cost US taxpayers over $179 million in FY2023.
— Department of Government Efficiency (@DOGE) January 22, 2025
The Mint produced over 4.5 billion pennies in FY2023, around 40% of the 11.4 billion coins for circulation produced.
Penny (or 3 cents!) for your thoughts.
Sources:https://t.co/Y5LlrpyA62…
Why Are Pennies So Expensive?
The rising cost of materials is a major factor. Pennies are mostly made of zinc with a copper coating, and the prices of both metals have surged in recent years. In fact, the cost of producing a penny has more than doubled since 2016, when it stood at 1.5 cents.
The U.S. Mint’s 2024 report revealed that minting and distributing a single penny now costs 3.7 cents—a striking example of inefficiency. Yet, pennies make up a significant portion of all coins produced, accounting for about 40% of the 11.4 billion coins minted last year.
The Bigger Picture: DOGE’s Mission
DOGE’s primary mission is to reduce federal spending by a staggering $500 billion annually. While eliminating pennies won’t make a huge dent, it’s a symbolic move to tackle wasteful expenses.
Former President Donald Trump, who supports DOGE, has emphasized its goal of slashing excessive regulations and restructuring federal agencies. Meanwhile, Elon Musk sees this as a step toward modernizing outdated systems and practices.
On Monday, President Trump signed an executive order officially making DOGE part of the executive branch, tasked with improving government efficiency through innovative solutions.
What Happens If Pennies Disappear?
The idea of getting rid of pennies isn’t new. Back in 2015, former Treasury Secretary Jacob Lew suggested suspending penny production, while some economists have called for completely removing them from circulation.
However, opponents argue that eliminating pennies could lead to price rounding, which might disproportionately affect low-cost goods. Canada, which stopped minting pennies in 2012, experienced a slight increase in prices due to rounding, costing consumers an estimated $2.2 million annually.
Could the Nickel Be Next?
The penny isn’t the only coin that costs more to produce than it’s worth. According to the U.S. Mint, making a nickel currently costs about 14 cents—more than double its face value.
If DOGE decides to eliminate the penny, the nickel may be next on the chopping block as the organization seeks to address inefficiencies across the board.
The Bottom Line
Phasing out pennies may seem like a small step, but it’s part of a larger effort to modernize government operations and cut unnecessary costs. With DOGE spearheading initiatives like this, Elon Musk’s vision for a leaner and more efficient federal government is starting to take shape.
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Premlata is a seasoned finance writer with a keen eye for unraveling complex global financial systems. From government benefits to energy rebates and recruitment trends, she empowers readers with actionable insights and clarity. When she’s not crafting impactful articles, you can find her sharing her expertise on LinkedIn or connecting via email at [email protected].