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Legislation aims to minimize pennies

July 18, 2001
Web posted at: 11:20 AM EDT (1520 GMT)

RESOURCE
 

WASHINGTON (CNN) -- Saying pennies have "virtually no value," Rep. Jim Kolbe, R-Arizona, introduced legislation this week to require businesses to round transactions up or down to the nearest five cents.

"If we reduce the use of the penny, we will save businesses money and decrease the time we spend at the store," Kolbe said in a written statement.

Kolbe spent several weeks attempting to drum up popular and congressional support for his proposal before introducing the bill, called the "Legal Tender Modernization Act."

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Does the penny have a place? CNN's Candy Crowley reports (July 17)

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He said it favors neither the consumer nor retailer because the "probability of rounding up or down is 50 percent either way -- it would all come out even in the end."

His bill, he said, just makes sense. "Most people stash away or toss aside pennies instead of reusing them, thereby forcing the federal government to produce billions more every year at little, if any, profit," Kolbe said.

The idea is not new to some Americans. U.S. military bases overseas already round purchase prices up or down because it's too expensive to ship pennies to the bases, Kolbe said.

Critics say pennies matter for their symbolism and their economics. They say retailers will find a way to round up more than down.

"What we are talking about is a $600 million tax on consumers from those cash transactions," said Mark Weller of the Americans for Common Cents. "Not only is there that overall effect, but you are disproportionately hurting the poor and those who can least afford it."

The one-cent coin was the first currency of any type authorized by the United States. Over 300 billion one-cent coins, with 11 different designs, have been minted since 1787.

Kolbe's legislation also would allow the Bureau of Engraving to print currency, postage stamps and security documents for other countries, boosting income.

WHAT DOES IT MEAN?
 

disproportionately

not evenly distributed



RELATED STORY:
U.S. Mint targets piggy banks, seeks pennies
July 10, 1999

RELATED SITES:
United States Representative Jim Kolbe
American's for Common Cents Online
The United States Mint
Federal Reserve Board

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