© John W. Poole/National Public RadioMillions of dollars worth of $1 coins languish in a vault at the Federal Reserve Bank of Richmond's Baltimore branch.
Budget cuts thanks to the stalled economy have imperiled care for the mentally ill, left a new school building unstaffed, and perhaps most disastrously, limited efforts to keep nukes out of the hands of terrorists. And yet the Federal Reserve Bank of Richmond is sitting on $1 billion in gold dollar coins it says the American public has little interest in using.
Two reporters from NPR's Planet Money visited the facility where the coins are kept, in Baltimore, Md., and offer up a report about the stash of funds that the American public doesn't care for, Meanwhile, even as the coins gather dust, American taxpayers are paying top dollar (as it were) to store the surplus--and even to increase it.
The surplus of dollar coins is due in part to 2005 legislation introduced by then-Delaware GOP Rep. Mike Castle. In an effort to get the American public to adopt the coinage, Castle's bill mandated that the U.S. Mint produce coins commemorating every U.S. president (we're currently up to number 18, Ulysses S. Grant). In order to win broader support for the measure, Castle also agreed that 20 percent of the coins minted under the new bill would still feature the coin's previous figurehead, famed Native American figure Sacagawea.
And while casting money isn't the same as having it around to fund programs, switching Americans over to dollar coins has been sold as a money saving strategy--coins have a longer shelf life than bills, and according to a 2011 GAO report, converting to coins would save the government $5.5 billion over the next 30 years. However, that profit margin is largely made up of the difference between how much the coins cost to manufacture and the price at which they are then sold to the public, NPR notes--and the Federal Reserve has largely dismissed the case for dollar coins as a net gain for the government, noting that these kind of savings are not likely to translate into benefits to the larger economy.
Despite Castle's good intentions, the effort to get Americans to embrace dollar coins seems to be a failure. As NPR reports, the Federal Reserve's own report to Congress last year noted that three-fourths of all Americans are still resistant to the idea of a dollar coin. "The argument is about 50 years too late," anthropologist Jack Weatherford told NPR. "Coins have rapidly become less and less important in our society - like paper money itself is becoming less and less important."