
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, May 24, 1990                   TAG: 9005240061
SECTION: VIRGINIA                    PAGE: C-6   EDITION: METRO 
SOURCE: The Washington Post
DATELINE: WASHINGTON                                LENGTH: Medium

PINCHING PENNIES PERMANENTLY NOT POPULAR IDEA, PANEL HEARS

The penny's value may have plummeted to one-seventh of its original worth, but Americans still love their pennies and are in no mood for a new coin system that would eliminate both one-cent coins and the $1 bill, the General Accounting Office told a congressional panel Wednesday.

Citing the failure of the Susan B. Anthony $1 coin in 1979 and recent public opinion surveys, the GAO said a new coin system could work, but only if Congress and the Bush administration firmly endorse the change and then "stand up" to the public outcry that is certain to follow.

The GAO said that seems unlikely although the vending machine industry and brass and copper groups have been arguing for several years that it would be more economical for the federal government to follow the lead of a number of Western countries and eliminate the penny as a nuisance. The groups have advocated a coinage system that would replace dollar bills with coins and allow merchants to round off customer bills to the nearest five cents.

In a report to the House subcommittee on consumer affairs and coinage, the GAO agreed with some industry claims, saying the government might save about $318 million a year by such a change. But it warned that the savings would be dependent on strong public acceptance of a new $1 coin.

Winning public acceptance of such a change will require strong support from the executive branch. John S. Baldwin, a GAO assignment manager, noted the Treasury Department's coolness to the idea and said: "We don't see any real champion coming forth in the executive branch."

The idea of a new golden $1 coin, featuring a likeness of Christopher Columbus, has wide support in Congress and its backers said they were cheered by Wednesday's hearing. Rep. Jim Kolbe, R-Ariz., the chief sponsor of the legislation, said that the GAO's savings estimates were triple his and he gained one new backer at the hearing.

The death of "the darling penny" is inevitable, declared Rep. Nancy Pelosi, D-Calif. "They will have a new place in our lives as a memento, which it is now."

Surveys, including a poll the zinc industry had the Gallup Organization conduct last month, indicate strong opposition to a new coin system. The Gallup survey showed that 59 percent of those surveyed opposed creation of a new $1 coin and that, among those who favored the change, 52 percent wanted the paper dollar retained. The zinc industry wants the penny, which is 91 percent zinc, retained as one of the nation's coins.

Despite a sevenfold drop in its value since 1793, demand for the penny remains strong, the GAO said. It recommended the government continue making them and the much less-used half dollar. Both can be produced for less than their face values, the GAO said.

by CNB