Memo to the Super Committee: Is this the best you’ve got?
The twelve-member debt reduction ‘super committee’ is tasked with a pretty tall order: cutting $1.5 trillion from the federal budget by Thanksgiving. If the committee fails in its mission, it triggers across-the-board spending cuts including deep cuts to the defense budget. So, needless to say, the stakes are rather high.
So with a dozen handpicked Member of Congress, vast resources at their disposal, and a ticking clock, we should expect to see some truly innovative and effective proposals for cutting government spending, yes? Not quite. Instead we are getting this:
Rep. David Schweikert (Ariz.) and two other House Republicans — including supercommittee co-chairman Jeb Hensarling (Texas) — introduced legislation last week aimed at retiring the paper dollar. Schweikert said his bill would save billions of dollars over the next few decades by transitioning to a dollar coin in four years, or as soon as $600 million worth of dollar coins are in circulation.
The total projected savings? $5.5 billion over 30 years. Apart from being a barely-measurable fraction of the total the super committee must cut, it requires a significant up-front expenditure on producing expensive metal coins. Spending money to make money may be a necessity for Wall Street investors, but its probably not the best strategy for a country already trillions of dollars in debt.
Besides, even the small cost savings are dubious. From USA Today this week:
There are no financial savings from using coins and eliminating bills. Supporters of the dollar coin cite a Government Accountability Office report predicting several billion dollars worth of savings over 30 years. However, this figure is incredibly misleading. The GAO report itself admits that factors outside the scope of financial benefit to the government were not considered, including the impact on private businesses and banks, and the costs of transferring, distributing, storing, authenticating and managing dollar coins.
Another issue that will prevent the coins from being widely used: Americans simply don’t like dollar coins. They are clunky, inconvenient, and a pain to carry around – especially for men. Previous iterations of the dollar coin, like the Susan B. Anthony and Sacagawea dollars, have been unmitigated failures.
A recent Lincoln Park Strategies poll backs that up:
–76 percent of voters oppose doing away with the dollar bill
–77 percent of both Democrats and Republicans oppose the idea along with 73 percent of Independent voters
–63 percent of voters say they are less likely to support a candidate who favors getting rid of the dollar bill including 60 percent of Republicans, 58 percent of Independents and 68 percent of Democrats
–82 percent of voters in the South, 71 percent of voters in the Northeast and 74 percent of voters in the West want to keep dollar bills in their pockets as opposed to carrying around extra change
–Americans view the dollar bill as more convenient (77 percent), more widely accepted (86 percent), and more secure (54 percent); they view the dollar coin as unwanted (77 percent) and unnecessary (75 percent)
But don’t take my word for any of this; Neil Cavuto recently evaluated the proposal on his Fox News show and came to the conclusion that it is a “silly idea” in the face of the super committee’s massive task.