Congress has passed the Currency Modernization Act, which phases out the US penny by January 1, 2027 β ending 233 years of the 1-cent coin in American commerce. The bill passed 312-108 in the House and 67-33 in the Senate, reflecting the broadest bipartisan consensus on any economic legislation in years.
The economic case for abolition is overwhelming. The US Mint currently spends 3.1 cents to produce each 1-cent penny β a cost overrun that has persisted for 18 consecutive years. The federal government loses $90 million annually simply making pennies. American businesses lose an estimated $900 million annually in the time their employees spend counting, sorting, and transporting pennies.
Under the new law, prices will be rounded to the nearest 5 cents at the point of sale for cash transactions. Electronic transactions remain unaffected β digital payments can still process to the exact cent. Canada, which eliminated its penny in 2013, reported no measurable inflation from the policy and documented significant cost savings for both government and businesses.
The zinc industry β which lobbies aggressively to preserve the penny since zinc comprises 97.5% of each coin β spent $4 million opposing the bill but ultimately could not overcome decades of public frustration with a coin that most Americans refuse to carry.
