Senators John McCain and Tom Harkin introduced legislation on Tuesday that could have serious effects on your wallet — literally, not figuratively. No, they’re not raising or lowering taxes (recall civics, those bills start in the House), but they are asking that the government stop making the $1 bill, replacing it with a $1 coin instead.

It’s not that we don’t have dollar coins — we’ve been minting them off and on since 1796 — but they simply haven’t caught on with Americans, who love their dollar bills. The legislation presents a perfect problem for a Congress that says a lot and does very little. Are they serious about fiscal austerity or do they want to coddle their constituents, who loathe change so much (no pun intended)?

According to Reuters, the Currency Optimization, Innovation and National Savings (COINS) Act of 2012 would phase out the $1 bill, replacing it entirely with $1 coins. While efforts like this have failed to pass Congress in the past, this bill might actually have legs, given Washington’s political climate. It has the support of the Council for Citizens Against Government Waste (CCAGW), the lobbying arm of Citizens Against Government Waste, a conservative non-profit that aims to make Washington leaner and more accountable. According to a Government Accountability Office report from March of last year, changing our currency denominations in this fashion would save taxpayers $5.5 billion during the next three decades.

Given our current deficit woes, that’s a drop in the bucket, but it’s an easy win. Regardless of CCAGW’s actual influence on Washington, which is likely minuscule, the bill has bipartisan support — Harkin is a Democrat, and McCain a Republican — and is an excellent way for members of Congress to show they’re serious about fiscal austerity.

But in doing so, they’d also be doing away with one of the most potent symbols of America’s rapidly fading economic dominance. They’d be getting rid of the dollar, the buck, the greenback! Americans love their dollar bill, and despite the fact that we’re virtually alone among developed economies in offering a paper bill for such a small denomination, the bill is iconic. It’s hard to even think of our currency without thinking of the bill, which is recognizable the world over, and accepted in several countries alongside or instead of a local currency. So never mind that most countries don’t make paper versions of anything worth so little. The smallest Euro bill is five Euros (about $7), and the smallest Japanese Yen bill is 1000 (about $13).

We are alone in this love for paper money. But consider semi-routine things like tipping your cabbie, bartender, or bellhop. If the bill passes, you’ll be handing coins out in the future. Vending machines will require upgrades. Winning back alley dice games will be substantially less fun. Making it rain at King of Diamonds? No, you might hurt the dancers. Indeed, the American system of tipping seems to be the best argument for keeping the $1 bill around. Tipped employees might be the biggest losers should the bill pass.

And as anyone who has ever traveled in Europe knows, it can be quite stressful to have a pocket full of coins that actually totals up to $10 or so, presenting the very real possibility that you’ll drop a few dollars while fumbling for your phone. We are simply not accustomed to thinking of coins as valuable things, and that might be a difficult adjustment.

And if you’ve ever worked a cash register before, you know that dollar coins are reserved for customers you dislike. While we still have both forms of currency, the Sacagawea or Susan B. Anthony, or whoever is on the coin at this point, that coin is just an inconvenience so long as we still have the Washington. So if Capitol Hill is serious about fiscal austerity, members of Congress need to make decisions that might upset Americans, and force them to change their habits. No matter the symbolic loss, the switch to $1 coins seems like the right one.

At least until we find out McCain or Harkin own a controlling interest in a coin-purse manufacturer.

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  • Benjamin Lascelle

    I don’t think tipped employees stand to lose much. We still have the $2 bill which is valid US currency and always fun to give out. It seems special, unique, and almost fake, but it’s as real and as spendable as any paper bill.

    • I do wonder whether the $2 bill could gain in popularity if the $1 bill were done away with. Still, I think the bill is much too rare to catch on and printing more of them would negate any savings associated with the COINS Act.

      • Sunk818

         It would not negate savings.

        1) The psychology of coin usage means that consumers are more less restrictive about spending coins over bills.

        2) the profit margin on coins is much better than paper bills:

        3) For a ten year period, government could subsidize the infrastructure replacement required to accept dollar coins… coin purses for strippers, new vending machines, new parking meters, new cash registers, etc…

        • Ah we have a misunderstanding here. I mean that for the $2 bill to become more popular the gov’t would need to print more of them, and were that to happen, it would make the federal savings associated with the $1 coin switch moot. 

          • Sunshine25

             Federal Reserve ($1 bills & $2 bills) is a private bank. The Mint is government owned. Bills = Private, Coins = Government.

            • As I understand it, the Fed can ‘print money’ by increasing the money supply, but they don’t literally print money. This is an important distinction to make when talking about costs associated with making currency. The Bureau of Engraving and Printing makes our dollar bills, and they are part of the Treasury Dep’t. 

              • Because the Treasury is controlled by the Fed, which is in turn controlled by Goldman Sachs. Our government’s entire economic structure is controlled by private organizations, not elected or appointed politicians. I don’t think this is what our founding fathers had in mind when they drafted the Constitution — three branches of public government… and a fourth, shadowy private one?

    • I do wonder whether the $2 bill could gain in popularity if the $1 bill were done away with. Still, I think the bill is much too rare to catch on and printing more of them would negate any savings associated with the COINS Act.

  • Sure, go ahead and replace the $1 bill I don’t use today with $1 coins. Honestly, I can’t remember the last time I saw cash.

  • Munzen

    Very few vending machines would require major upgrades. For years many of them have been built to accept $1 coins mechanically but not necessarily electronically. A minor software change would be required, that’s all.

    And yes, a revived $2 bill WOULD result in savings over $1 bills for the simple reason that fewer of them would be needed to make change. On average, 8 to 10 _B_illion $1 bills are printed each year, and they wear out in about 3 or 3.5 years. Cut that in half (or even more, due to somewhat lower circulation velocity) and you’re talking serious savings. Of course, a small $2 coin like they have in Australia would save even more but given this country’s resistance to doing anything to fix its coinage system, we’d have to take one step at a time.

    • These are interesting points here, thanks for this. I just realized how little I know about vending machines. And you’ve got to think a more popular $2 bill would be a boon to bartenders!