HR 3074: Common Cents Act

HR 3074 in plain English: The Common Cents Act would end routine U.S. production of the penny, with the Treasury Department only minting pennies to meet collector needs. All cash transactions, including retail purchases, other cash transfers, and cash wage payments, would be rounded to the nearest five cents. The bill would take effect one year after becoming law.

Stated purpose

This bill aims to stop the U.S. Mint from producing pennies for general circulation and to allow cash transactions to be rounded to the nearest five cents, taking effect one year after passage.

Key points

• Ends regular penny production; Treasury may still mint pennies for collectors
• Pennies remain legal tender even after production stops
• All cash payments rounded to nearest amount divisible by five cents
• Amounts of $0.01 or $0.02 may be rounded up to $0.05
• Takes effect one year after enactment

Arguments supporters make

• Producing pennies costs more than a penny is worth, so stopping production saves taxpayer money over time.
• Eliminating the need to count and handle pennies speeds up cash transactions for both shoppers and businesses.
• Other countries have successfully phased out their lowest-denomination coins without major problems for consumers or the economy.

Arguments opponents make

• Rounding, even if small, could end up costing lower-income people who rely on cash more than those who pay electronically, since card and digital users are exempt from rounding.
• Businesses could potentially set prices to consistently trigger upward rounding, quietly collecting small extra amounts from cash-paying customers over many transactions.
• Pennies remain legal tender under the bill, meaning large stockpiles will still exist in circulation for years, complicating the transition and limiting near-term savings.

Tradeoffs

Ending penny production may save government money and simplify transactions, but the rounding system applies only to cash payments, meaning the impact falls unevenly on people who use cash versus those who pay electronically. Protecting consumer interests through rounding rules adds complexity to what is meant to be a simplification.

Current status in Congress: Passed House.

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