Should the U.S. scrap the dollar bill?

As the federal government attempts to cut costs, the dollar bill itself has gotten caught in a tug of war.

On one side are proponents of the traditional paper currency; on the other are those who want to replace it with more durable metal coins.

"Most people take the dollar bill somewhat for granted. It's always been there, it's reliable, it's a symbol of our nation's history, it's a symbol of our nation's economic strength," said David Crane, spokesman for Americans for George, a group lobbying on behalf of the familiar greenback bearing George Washington's portrait.

Crane is also vice president and an eighth-generation paper maker serving as vice president of Crane & Co., a Massachusetts business that is the sole paper supplier for U.S. currency.

Jim Kolbe, a former congressman from Arizona who heads the Dollar Coin Alliance, an organization in favor of the coin, said the American currency system is outdated.

"It's important that we have a currency that works, that people will use instead of having to always use credit cards."

The American dollar bill has been around since 1862, when the federal government issued the first ever round of $1 notes, and inflation has since taken a toll on the buying power of a dollar.

"It's time to recognize the realities, the toll that inflation's (had)," Kolbe said. "It's time to recognize that toll and to simply modernize the currency."

This is not the first time Congress has seen a push for the dollar coin.

A decades-long debate saw a resurgence following a 2011 report released by the Governmental Accountability Office (GAO), an independent, nonpartisan congressional watchdog agency that has examined the issue five times since 1990. According to the agency's report from this past March, the federal government would save $5.5 billion over 30 years by making the switch.

"With our nation's debt now over $15 trillion, Congress must look at every area of the federal government, big or small, to save money," said Sen. John McCain, R-Ariz., co-sponsor of a bill that would do away with the greenback.

Sen. John Kerry and Scott Brown, the Democratic and Republican senators from Massachusetts, home of Crane & Co., have proposed opposing legislation to end production of the dollar coin for good.

Brown asked the GAO to reexamine the issue one more time, giving different possible scenarios of how the switch could play out.
 

The GAO complied, releasing a report Feb. 15 with alternative scenarios. Still, the agency contends that the federal government would save money --albeit $1 billion less than previously projected.

As the debate ensues, 1.4 billion brand new dollar coins are sitting unused in Federal Reserve vaults (the U.S. Mint suspended the presidential dollar coin program in December 2011 to cut federal spending) while the Bureau of Engraving and Printing printed 2.9 billion $1 notes in 2011.

Crane said the change would cost his company hundreds of jobs as the $1 bill makes up a significant amount of the company's production. The lowest-denomination notes make up 45 percent of the currency production at the Bureau of Engraving and Printing.

"Would we survive?" Crane asked rhetorically. "Yeah, I suppose we would; we would just be smaller -- we'd have to figure out a way to downsize the company and a number of these jobs would just go away and not come back."

Bob Opiela, a tourist visiting Washington from Pheonixville, Pa., said he likes the coins -- until he found out they might become the new normal.

"I think that would be terrible," Opiela said. "I think people are used to dollar bills. They're kind of easier to carry; you can put them in your wallet or purse."

Like Congress, the people we spoke to were split on the issue.

Would you be in favor of scrapping the dollar bill?

"Absolutely, throw the penny in there as well," said David Wall, a government employee from Washington, DC.
 

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