Iowa Senator Tom Harkin, along with John McCain of Arizona, Mike Enzi of Wyoming, Oklahoma’s Tom Coburn, and Mark Udall of Colorado, have introduced a second stab at the Currency Optimization, Innovation, and National Savings Act (yes, it spells COINS), which would promote and ease in the distribution of dollar coins. It also sets a timetable for dollar coins to replace Federal Reserve Notes of the same denomination.
According to the Act, the Federal Reserve would be allowed to continue putting $1 bills into circulation for four years after the law goes into effect or when the rate of $1 coins being put into circulation passes the $600 billion/year threshold, whichever comes first.
For one year following that point, the Fed may continue to put dollar bills into circulation, but may not order any new dollar bills be printed.
As in previous attempts to push similar legislation through, backers cite decades of Government Accountability Office reports showing that because coins are more durable than printed money, the initial costs to mint new coins would ultimately be offset by anywhere from $200-500 million/year savings. Harkin points to Canada’s decision to replace its printed dollars with coins, saying that the savings ended up being ten times larger than initially projected.
Even after dollar bills are taken out of circulation, they would continue to hold their status as legal tender.
“The benefits of the dollar coin have long been recognized by reputable sources such as the GAO as a smart investment for our country,” said Harkin in a statement. “The experiences of countries around the world reveal that transitioning to dollar coins will generate significant savings to taxpayers without disrupting businesses or consumers. I am hopeful that this bipartisan legislation will continue to gain traction in Congress.”
In a 2011 GAO report on the subject, researchers wrote that one of the biggest roadblocks to the adoption of a dollar coin is resistance to change (pun intended) and lawmakers’ and regulators’ hesitance to simply pull dollar bills from circulation.
It cited similar pre-transition worries in Canada and the UK that ultimately proved to be much ado about very little.
“Officials from both countries told GAO that this step was essential to the success of their transition and that, with no alternative to the note, public resistance dissipated within a few years,” reads the 2011 report.
Harkin and McCain first gave the COINS Act a shot in 2012, but like many pieces of legislation, it died in committee.