WASHINGTON, DC – U.S. Senator Jack Reed today commended the Obama Administration’s announcement that the U.S. Mint is suspending the production of Presidential dollar coins for circulation.  Today, nearly 1.4 billion surplus dollar coins are sitting in Federal Reserve vaults due to lack of demand for the coins.  By halting this unnecessary production, the Obama Administration estimates it will save taxpayers at least $50 million per year in production and storage costs.

“I applaud the steps the Obama Administration is taking to end government waste,” said Senator Reed. “The build-up of excess coins was troubling and costly.  If people aren’t using these coins, it makes sense to stop making them.”

In July, Senator Reed, along with Banking Committee Chairman Tim Johnson (D-SD) and Senator John Tester (D-MT) sent a letter to the Federal Reserve and the U.S. Mint asking both agencies to explore what steps they could take to protect taxpayer resources and stop producing unwanted $1 coins.

In 2005, President George W. Bush signed the Presidential $1 Coin Act into law, mandating that the United States Mint issue four new Presidential $1 Coins with the likeness of every deceased President each year from 2007 to 2016.  The law was written by then-Senator John Sununu (R-NH) and had over 70 Senate cosponsors, including Senator Reed.  The program was supposed to be modeled after the successful State Quarter program, which was embraced by the public and collectors and which generated about $4.6 billion in profits from collectors taking the coins out of circulation between January 1999 and April 2005, according to the Congressional Budget Office.

However, the demand for $1 Presidential Coins was far lower than the bill’s authors had projected, with more than 40 percent of the $1 coins being returned to the Federal Reserve, because nobody wanted to use them.

The Obama Administration today announced that in order to put a stop to this waste, the Administration will halt the production of Presidential $1 Coins for circulation.  The Administration will still continue to produce a relatively small number of the coins to be sold to collectors, at no cost to taxpayers.  Instead of producing 70-80 million coins per President, the U.S. Mint will now only produce as many as collectors demand.  Regular circulating demand for $1 coins will be met through the Federal Reserve Banks' existing inventory, which will be drawn down over time.