Trump takes aim at 'wasteful' government spending by ordering end to penny production

cnbc.com:

President Donald Trump ordered a halt to the production of new pennies, which he said will help reduce «wasteful» government spending.

«For far too long the United States has minted pennies which literally cost us more than 2 cents,» Trump said in a Truth Social post. «This is so wasteful! I have instructed my Secretary of the US Treasury to stop producing new pennies. Let's rip the waste out of our great nations budget, even if it's a penny at a time,» Trump wrote.

It's not clear whether the president has the authority to stop the manufacture of the 1-cent coin. According to the U.S. Constitution, coinage power, as recognized by the Supreme Court, is «exclusive» to Congress. Federal law says the Treasury secretary can mint and issue coins as necessary for the needs of the United States.

But at least one analyst on Wall Street expects that the penny's days are numbered. TD Cowen's Jaret Seiberg said the halt will likely pass judicial review, leading to a shortage of the coin.

«We believe this order would survive judicial review, which is why this is likely to occur,» Seiberg wrote Monday. «We worry about this leading to a shortage of pennies, which could force merchants to pay banks more for coins. It also adds legal risk for merchants and banks. That could create the crisis needed to force Congress to act.»

Seiberg said he expects this could support the move toward electronic payments, bolstering companies such as Visa, Mastercard and other real-time payment networks.

What is clear is that pennies cost more to make than they are worth. In 2024, the U.S. Mint spent 3.69 cents to manufacture each penny, according to an annual report. That meant the cost of each penny has run above its face value for a 19th straight fiscal