Pennies from hell: Change we can't believe in

The cost for the U.S. government to produce pennies and nickels is more than the face value of the coins, a government watchdog points out.

Judicial Watch, in a statement Wednesday, called it an "egregious waste" and a "fleecing."

The U.S. Treasury's practice, Judicial Watch said, "means hundreds of millions of coins have been sold well below cost."

"Incredibly, the government has knowingly done this for at least eight years and actually documented the egregious waste in several reports though nothing has been done to stop it," Judicial Watch said. "In fact, both the Treasury and the Bureau of the Mint have extensive documentation on this, yet it continues today."

Judicial Watch cited a 17-page 2012 U.S. Treasury report that presented the key information in the closing paragraphs.

"Challenges also exist with coin production," the report said. "In recent years, the [U.S.] Mint reported that the cost of producing penny and nickel coins were double their face value and that metal prices have caused the production costs to be higher than the coins' face value for the past six years."

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The report said Treasury "also suspended production of the dollar coins to save money in production and storage costs due to excess supplies on hand and low demand for the coins."

Judicial Watch commented that if "a private business operated in this manner, it would surely go broke in no time."

The buried reference to the cost of producing money was noticed by a lawyer who brought it to the watchdog group's attention.

"The audit also mentions the boondoggle surrounding the suspended dollar coins. Low demand and the high cost to store the excess supplies led the Treasury to stop making them yet in fiscal year 2011 production costs of the unpopular dollar coin were about a fifth of its value, according to the report," Judicial Watch said.

The organization said Treasury is "well known for its transgressions not to mention wasting public funds."

Earlier this year, Judicial Watch found Treasury paid an upscale public relations firm $112.7 million to promote money.

The Treasury Department’s Bureau of Engraving and Printing paid to educate the public about the redesign of the $100, $50, $20, $10 and $5 notes.

Judicial Watch said American taxpayers received in "the fleecing" to promote an established product that needs no promotion "education materials on the new bills in 18 foreign languages, awareness programs aimed at domestic and Latin American markets, stakeholder and media outreach and an interactive website."

The U.S. produced 6 billion pennies in 2012 and more than 7 billion in 2013, with a combined face value of about $130 million. About 1 billion nickels were made in 2012 and about 1.2 billion in 2013.

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