WASHINGTON — Once Congress sets its sights on saving money, there is no telling where the effort may lead. Now a bipartisan contingent on Capitol Hill hopes changing the dollar itself can save taxpayers hundreds of millions of bucks a year.
The idea is to replace the familiar old dollar bill with a shiny new dollar coin.
"It's a money saver," said Rep. Esteban E. Torres (D-Pico Rivera), who is co-sponsoring the legislation in the House with Rep. Jim Kolbe (R-Ariz.).
Torres said the General Accounting Office has estimated the change would save the government as much as $12 billion over the next 30 years--an average of $395 million a year--because coins stay in circulation far longer than the 17-month life span for a typical dollar bill.
The cost of printing new notes and shredding the old ones would be eliminated if a dollar coin were approved, they said.
BACKGROUND: Despite the obvious advantages, some members of Congress are wary. The last effort to introduce a dollar coin was a spectacular flop. The Susan B. Anthony dollar coin, introduced in 1979, was so unacceptable to the public that millions of these coins remain stacked in warehouses at great expense to the government.
But Torres said valuable lessons were learned from the sad experience with Susan B. Anthony. In part, he said, the public resisted that coin because it closely resembled a quarter and the paper dollar was not phased out at the same time.
PROPOSAL: A better-designed coin, golden in color, might be more acceptable, Torres believes, based on Canada's experience with a dollar coin.
It was put into circulation in 1987 and the Bank of Canada stopped issuing dollar notes two years later. More than 600 million Canadian dollar coins are now in circulation, a GAO report says, and the change has saved $450 million Canadian dollars in the last five years.
Australia, France, Germany, Japan, the Netherlands, Norway and Spain, among other countries, also have issued high-denomination coins in recent years without long-lasting public resistance.
In addition, Torres said, a dollar coin would be more in demand by public transit operations and the vending machine industry because of the higher cost of collecting and counting paper money.
"The city of Los Angeles alone would save $4 million a year just by not counting $1 bills collected in fare boxes," Torres said. Coins, in contrast, can be counted by machine or by weight.
OUTLOOK: Legislation to authorize the dollar coin is being prepared by the House Banking Committee with Republicans and Democrats uniting behind the idea. The Clinton Administration also backs the change.
A possible controversy over the choice of the face of the coin would be averted by approving a commission to decide on the design. A second possible flap also is being avoided by a provision of the legislation that would require the words "In God We Trust" to be on the new coin.
"It's painless," Torres said. "The government also needs to change its way of doing business."
In the Senate, Pete V. Domenici (R-N.M.) has introduced similar legislation to authorize a gold-tinted dollar coin with high hopes of getting a law enacted in a year when Congress is searching for ways to save money.
"I have championed this bill since 1987 and, as everyone is attempting to find ways to cut down on waste, I believe its time has come," Domenici said. "Every year the U.S. government prints $1 bills at a cost of 3.5 cents and they only have an average life of 17 months. For an additional 2.5 cents the government can mint a dollar coin that will stay in circulation for up to 30 years."
Domenici said a coin would be more convenient for using parking meters, coin laundries and pay telephones.