The $179M Reason Elon Musk Might Eliminate the Penny

Elon Musk’s Department of Government Efficiency (DOGE) is making sweeping changes in the name of identifying and ending wasteful government spending. Amid massive firings and cancelled government contracts, Musk and Trump have also set their sights on eliminating the penny.

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While neither has eliminated the penny yet, there’s a $179 million reason behind their goal.

On January 21, the DOGE posted to X, stating, “The penny costs over 3 cents to make and cost US taxpayers over $179 million in FY2023.”

The United States Mint’s 2024 annual report indicates that in 2024, the unit cost for pennies was 3.69 cents, which is more than the coin’s value. The report indicates that the Mint produced nearly 3.2 million pennies in 2024 at a loss of $86 million.

Trump has also been vocal about eliminating the penny. On February 9, he posted on Truth Social, writing, “For far too long the United States has minted pennies which literally cost us more than 2 cents. 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 [sic] budget, even if it’s a penny at a time.”

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Musk and Trump aren’t the first to draw attention to the fact that the country is losing money by minting pennies each year. According to Planet Money, Jim Kolbe, a former Republican congressman, first fought to eliminate the penny in the 1980s. Kolbe stated that eliminating the penny was a logical move that could have saved the government a lot of money, but when Kolbe introduced new legislation in the 1990s, he faced resistance.

President Obama also supported eliminating the penny. He addressed the issue during a 2013 Google+ Hangout discussing his State of the Union address. “It’s one of those things where I think people get attached emotionally to the way things have been,” said Obama. “This is not going to be a huge savings for government, but anytime we’re spending more money on something that people don’t actually use, that’s an example of something that we should actually change.”

Eliminating the penny would save the government money, though it would have a minimal impact on personal finance. Without the penny, item prices would be rounded up or down to the nearest five cents. For example, an item that costs $1.99 would round up to $2, and an item that costs $5.49 would round up to $5.50. These small changes are unlikely to have much of a financial impact on consumers.