You have to give the Government Accounting Office high marks for being persistent in trying to get rid of the paper dollar bill.
At a hearing by the House Financial Services subcommittee last week, lawmakers again took up the issue of whether to phase out the greenback and replace it with a dollar coin. In its testimony, the Government Accountability Office estimated that the federal government would save about $4.4 billion over 30 years by switching to dollar coins. It reiterated an earlier recommendation that the United States phase out the dollar bill over a four-year transition period.
In 22 years, the GAO has recommended switching from paper to coins eight times. But the public has always balked and the dollar coin has never gained popularity. In fact, there are $1.4 billion of one-dollar coins now piled up in Federal Reserve vaults because the public refuses to use them.
It is evident that using coins would save a lot of money. Lorelei St. James, the director of the GAO, said trying to save the government money should be the country’s primary concern rather than consumer convenience, and if the paper dollar was to be replaced permanently, it could save the U.S. government about $146 million per year and $4.4 billion over a span of 30 years by shrinking production and processing costs dramatically.
The average dollar bill circulates for a little more than 4 1/2 years before it becomes unusable and is shredded for the landfill. A coin can remain in use about 40 years before it degrades, but even then it can be melted down to create new coins.
But Americans’ fondness of the greenback is strong. According to a survey conducted by the research firm Lincoln Park Strategies, 70 percent of those surveyed wanted the dollar bill to remain. Additionally, 73 percent said the dollar coin is completely unnecessary, 67 percent said the dollar bill is preferable because it’s easier to carry around, and 60 percent said the dollar bill should remain because it’s a better symbol of American tradition and pride than the coin.
The GAO should put its paper-for-coin switch on the backburner — again. There are more pressing problems in Washington these days — especially the looming “fiscal cliff.”