The penny is already on its way out. Now lawmakers are confronting an even stranger piece of American pocket change: a five-cent coin that costs roughly 13 cents to manufacture.
WASHINGTON — America’s loose change is getting an expensive reality check.
After Congress approved legislation formally ending production of the penny for general circulation, lawmakers are turning their attention to another money-losing coin: the nickel.
And the math is difficult to ignore.
It costs roughly 13 cents to produce a coin worth just five cents.
That doesn’t necessarily mean the nickel is about to disappear. Instead, Congress has opened the door for the Treasury Department and U.S. Mint to fundamentally change what the nickel is made of — potentially making it considerably cheaper to manufacture.
The Penny Is Effectively Finished
The bipartisan Common Cents Act cleared Congress in September and is awaiting President Donald Trump’s signature. The House approved the latest version on September 14, followed by unanimous consent in the Senate on September 28.
The legislation would permanently end penny production for general circulation while keeping existing pennies legal tender.
The move essentially codifies what the federal government had already begun doing: the Treasury stopped producing pennies for circulation in 2025 after manufacturing costs climbed to nearly four cents per one-cent coin.
Under the legislation, cash purchases can be rounded to the nearest five cents when exact change isn’t available. Electronic transactions — including credit and debit card purchases — continue to be charged to the exact cent.
So your $9.99 online purchase isn’t suddenly becoming $10.
But the penny isn’t the only coin losing the government money.
Meet America’s 13-Cent Nickel
The nickel presents an arguably more absurd economics problem.
The five-cent coin currently costs approximately 13 cents to manufacture, meaning taxpayers lose roughly eight cents every time the Mint produces one.
Today’s nickel is primarily copper — approximately 75% copper and 25% nickel — and rising material and manufacturing costs have made that composition increasingly expensive.
Rather than immediately eliminating the nickel, Congress has given Treasury another option:
Make a cheaper nickel.
The Common Cents Act authorizes Treasury to pursue a lower-cost composition if testing demonstrates that the alternative reduces manufacturing expenses without significantly disrupting vending machines and other coin-operated equipment.
One possibility outlined by lawmakers is a nickel constructed with a zinc inner layer and nickel outer layer. Previous legislative language specifically authorized testing that configuration while preserving the ability to manufacture the traditional copper-nickel version.
No, Congress Isn’t Actually Killing the Nickel — Yet
The headline practically writes itself: first the penny, now the nickel.
But there’s an important distinction.
Congress has not voted to eliminate the nickel.
The legislation instead gives Treasury greater flexibility to change its composition so that producing five cents doesn’t cost taxpayers 13 cents.
Sen. Cynthia Lummis, one of the lawmakers behind the Senate effort, has said the objective is to find a cheaper composition that can keep the nickel economically viable rather than simply getting rid of it.
That makes this less of a funeral for the nickel and more of a makeover.
Because if America is going to keep making five-cent pieces, having each one cost more than twice its face value isn’t exactly a sustainable business model.
Why Changing a Coin Isn’t as Easy as It Sounds
A cheaper metal sounds simple until you remember just how many machines across America recognize coins.
Vending machines, laundromats, parking meters, arcade machines and other automated systems rely on a coin’s physical characteristics to determine whether it’s legitimate.
Change the nickel too dramatically and potentially millions of machines could require modifications.
That’s why the legislation specifically requires consideration of the effect a redesigned nickel could have on coin-accepting equipment before a new composition is adopted.
Lawmakers have also urged Treasury to consider recyclability, domestic suppliers and the resilience of the metal supply chain when evaluating alternatives.
America’s Change Drawer Is Changing
The larger story isn’t really about pennies and nickels.
It’s about what happens when a monetary system designed centuries ago runs into 21st-century economics.
Americans increasingly pay with credit cards, smartphones, watches and digital wallets. Meanwhile, the government continues manufacturing physical currency whose raw materials can be worth more than the denomination stamped onto it.
The penny finally crossed the political threshold where Washington decided the tradition wasn’t worth the expense.
Now the nickel has entered the same conversation.
Don’t start hoarding nickels expecting them to disappear tomorrow. There is currently no congressional mandate to eliminate them.
But America’s five-cent coin may soon look exactly the same while being very different underneath.
And considering we’re currently spending about 13 cents to manufacture five cents, that’s probably one change Washington can make without needing a calculator to explain why.
THIS! Newsroom Take: The penny lasted more than two centuries before economics finally caught up with it. The nickel probably isn’t going anywhere yet — but when your five-cent coin costs 13 cents to make, the government isn’t minting money. It’s literally doing the opposite.
