It's not easy making money.
Few know that better than Edmund Moy, director of the United States Mint. He asked congressional lawmakers this week to strike down a provision in the proposed Coin Modernization and Taxpayer Savings Act of 2008, which focuses on manufacturing coins more cost effectively. The provision would require the Mint to start making steel-coated pennies within 180 days of the bill's enactment.
But Moy estimated it would take three to five months to determine the specifications of a cost-effective, copper-plated steel blank to make pennies. Otherwise, he said, it makes little sense to use steel, a cheaper metal than copper nowadays, if the manufacturing process is too costly.
In addition, it could take more than a year and a half for vendors that supply penny blanks to procure steel and invest in machinery needed to make the new pennies, the director said.
That timeline doesn't even count the public comment period and the bidding process.
"If the change is required in 180 days, production of the pennies will be limited to the capacity level of the blanks supplier at that time," Moy wrote in testimony submitted to a House Financial Services Committee panel during Tuesday's hearing on the bill. "This reduced production capacity will potentially result in a coin shortage."
Last year, it took 1.7 cents to make a penny and almost 10 cents for a quarter, resulting in a total loss of $100 million, according to the U.S. Mint.
Read Newsday to see what else Moy says about the proposed bill and test your coin smarts with the quiz below.
QUIZ
1. How much does it cost to make a quarter?
A. .1920 cents or about 19 cents
B. .0978 cents or almost 10 cents
C. .2891 cents or almost 29 cents
2. The answer is $132.7 million. What's the question?
A. How much did it cost to make pennies in fiscal year 2007?
B. How much did the federal government lose in making nickels?
C. What's the difference between the face value of all dimes minted in fiscal year 2007 and the manufacturing expenses for the dimes?
3. How many half-dollar coins were made in fiscal year 2007, which goes from October 2006 to September 2007?
A. Zero
B. 899,688
C. 574
4. What's the cost difference in making a quarter and making a nickel?
A. .0025 cents or a quarter of a cent
B. .025 cents or almost 3 cents
C. 15 cents
5. The federal government lost $100 million in making pennies and nickels in fiscal year 2007. How much did it lose in making them in fiscal year 2006?
A. $117 million
B. $88 million
C. $32.9 million
ANSWERS:
1. B
2. C
3. A
4. A
5. C