Legislation Aimed At Killing Dollar Coin Program
MARY LOUISE KELLY, host:
We have an update for you now, on our recent stories about dollar coins. We've reported there are more than a billion one dollar coins currently sitting unused in government vaults. That's because of a law Congress passed requiring a series of dollar coins honoring all the presidents. NPR calculated the unused coins have cost taxpayers $300 million so far. As David Kestenbaum reports, the U.S. Mint and some members of Congress are now trying to fix things.
DAVID KESTENBAUM: One strange twist to the story was that some people had been using the Mint's dollar coin mail order program to get free frequent flyer miles. Tim Brooks just got back from a trip to Hawaii, all on miles, thanks in part, to the U.S. Mint.
Mr. TIM BROOKS: The round-trip flights for me, my wife, and my son, four nights in Maui in a condo, and then the inner-island flights between Maui and Kauai, five nights in Kauai at a condo, and then two nights at one of the nicest hotels on the island there.
KESTENBAUM: You just order the coins with one of those credit cards that gives frequent flyer miles. The mint pays for shipping and when the coins arrived, you could just deposit the coins and use the money to pay off your credit card. Free frequent flyer miles. Brooks said he tries to spend the coins he gets.
On Friday, the mint announced it would no longer allow people to order coins with credit cards. Tom Jurkowsky, a spokesman for the mint, said it's clear some people are just depositing the coins at the bank.
Mr. TOM JURKOWSKY (Spokesman, U.S. Mint): While this is not illegal, it's a clear abuse and a misuse of the program.
KESTENBAUM: Jurkowsky said the program was intended for collectors or small businesses: car washes, laundry mats, or regional banks. The mint did try to address the frequent flyer problem a couple of years ago, he says, by limiting the number of coins people could order.
Mr. JURKOWSKY: We felt that that would solve the issue, and it obviously didn't, and this should do it.
KESTENBAUM: The Mint has sent out 284 million dollar coins through the mail since the program began. The reason the mint has been trying so hard to get the coins out there, and the reason so many coins are piling up, is the law Congress passed in 2005: the Presidential Dollar Coin Act. The way the law is written, it basically forces the Federal Reserve and the Mint to make more coins than the economy needs. Representative Jackie Speier, Democrat from California, has introduced a bill to fix the program. The best way to fix it she says, by killing it.
Representative JACKIE SPEIER (Democrat, California): It was a grand experiment. It didn't work, so it's time to accept that fact and move on.
KESTENBAUM: You're a Democrat. This would mean that the government would never make FDR coins or coins with Kennedy on them.
Representative SPEIER: Well, as painful as that is, the fact of the matter is that most of those coins would sit in vaults across this country.
KESTENBAUM: Speier says she's only seen a presidential dollar coin in circulation once or twice.
Representative SPEIER: I only recall, vaguely, having this coin in my hand one day, thinking is this really a quarter, and then trying to use it in a meter -a parking meter - and finding out, not only didn't it give me 25 cents worth of time, it gave me nothing.
KESTENBAUM: Adam Smith, Democrat from Washington State is also working on a bill, and three senators, including Tim Johnson, Chair of the Senate Banking Committee, have sent a letter to the Fed and the Mint calling the pile up of coins, troubling, and asking how things might be fixed.
David Kestenbaum, NPR News.
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