Legal Tender Modernization Act
Encyclopedia
The Legal Tender Modernization Act was a bill proposed by United States Representative Jim Kolbe
of Arizona
in 2002. Its main goal was to stop the continual production of pennies
. The bill also mentions other provisions including:
The bill failed to advance in the house and died when the 107th Congress adjourned.
Other common criticisms include charitable causes depending on the penny, its perceived historical importance, and the adverse effect on the zinc industry as a penny is 97.5% zinc.
Jim Kolbe
James Thomas "Jim" Kolbe is a former Republican member of the United States House of Representatives for Arizona's 8th congressional district, serving 11 terms from 1985 to 2007.-Early life:...
of Arizona
Arizona
Arizona ; is a state located in the southwestern region of the United States. It is also part of the western United States and the mountain west. The capital and largest city is Phoenix...
in 2002. Its main goal was to stop the continual production of pennies
Cent (United States coin)
The United States one-cent coin, commonly known as a penny, is a unit of currency equaling one one-hundredth of a United States dollar. The cent's symbol is ¢. Its obverse has featured the profile of President Abraham Lincoln since 1909, the centennial of his birth. From 1959 to 2008, the reverse...
. The bill also mentions other provisions including:
- Allows the Bureau of Engraving and PrintingBureau of Engraving and PrintingThe Bureau of Engraving and Printing is a government agency within the United States Department of the Treasury that designs and produces a variety of security products for the United States government, most notable of which is paper currency for the Federal Reserve. The Federal Reserve itself is...
to print postage stamps, currency, and security documents for foreign governments and U.S. states or political subdivisions in order to make foreign currency consistent with U.S. foreign policy.
- Five different new designs each year for the $2 Federal reserve notesUnited States two-dollar billThe United States two-dollar bill is a current denomination of US currency. President Thomas Jefferson is featured on the obverse of the note...
- Prohibits redesigning the $1 Federal Reserve Note, as the $1 Federal Reserve NoteUnited States one-dollar billThe United States one-dollar bill is the most common denomination of US currency. The first president, George Washington, painted by Gilbert Stuart, is currently featured on the obverse, while the Great Seal of the United States is featured on the reverse. The one-dollar bill has the oldest...
is not as inclined into being counterfeited therefore there is no need of a redesign
- States that the seigniorageSeigniorageSeigniorage can have the following two meanings:* Seigniorage derived from specie—metal coins, is a tax, added to the total price of a coin , that a customer of the mint had to pay to the mint, and that was sent to the sovereign of the political area.* Seigniorage derived from notes is more...
(the U.S. government's profit earned from selling money to the Federal Reserve) should be included in the budget as a receipt
The bill failed to advance in the house and died when the 107th Congress adjourned.
Criticism
Critics of the Legal Tender Modernization Act state that by eliminating the penny, the rounding system would increase prices that could hurt the consumer, especially the lower class. Kolbe however has responded to such criticism and has stated that the rounding system "favors neither the consumer nor the retailer because the probability of rounding up or down is 50 percent either way -- it would all come out even in the end."Other common criticisms include charitable causes depending on the penny, its perceived historical importance, and the adverse effect on the zinc industry as a penny is 97.5% zinc.