Yesterday, Sen. Tom Coburn (R-OK) unveiled his dead-on-arrival plan to reduce the nation’s debt by $9 trillion over the next 10 years. Coburn, who stormed out of debt talks a few weeks ago in a temper tantrum, hailed his own 614-page report as taking on both sides’ sacred cows. “Nobody is going to like what we’ve done because everybody gets a pinch,” he said at a press conference. Coburn proposes major cuts to veteran’s benefits, student aid, and Medicare. He also includes an assortment of off-the-wall ideas, like completely eliminating the $1 dollar bill.
That’s right — the curiously titled “Back in Black” plan proposes completely eliminating the $1 bill and replacing it with $1 coins. Coburn estimates this will save taxpayers $2.04 billion over 10 years:
The Treasury Department should phase out use of the $1 bill and replace it with the $1 coin. Paper-based currencies wear out faster than coins, and so cost taxpayers more in the long run. According to GAO, starting in the 1980s, “Over the last 47 years, Australia, Canada, France, Japan, the Netherlands, New Zealand, Norway, Russia, Spain, and the UK, among others, have replaced lower-denomination notes with coins.” GAO also estimates that over a 30-year period, the average annual savings would be approximately $184 million.
Coburn cites numbers by the well-respected GAO, but misrepresents the savings to be had. The GAO estimates savings of $184 million a year could come over a 30-year period — Coburn makes it seem like Americans would see over $2 billion in savings in the next 10 years.
However, eliminating the dollar bill is a proposal endorsed by respected voices on the left and right. As GAO notes, there is one problem with the plan: When given a choice between dollar coins and dollar bills, Americans always choose bills. Americans would much rather carry light bills around than heavy coins. The GAO has made similar proposals four times during the past two decades, and nothing has ever come of it. Although now that a new zeal to cut the debt and deficit has descended on DC, the time may be right for a change.