Kolbe and many other coin supporters said politics has also been a major obstacle. Prominent Massachusetts Democrats such as Financial Services ranking member Barney Frank and the late Sen. Edward Kennedy have been ardent defenders of Crane & Co., which manufactures the cotton-based paper used in U.S. currency. The company, known to the public for its fine stationery, is based in the western Massachusetts district of 10-term Democratic Rep. John Olver.
“Clearly they had an interest in maintaining the use of the paper,” Kolbe said. “Crane was the only company that could qualify as the producer.”
Olver does not object to the production of the coin as long as the paper bill remains as well, said his chief of staff, Hunter Ridgway.
“We don’t really favor the bill over the coin or the coin over the bill. What he does favor is letting the public choose what they want,” Ridgway said, adding that an investment in any kind of cash may be a waste with consumers increasingly relying on credit cards and other cashless payment.
One-dollar bills represent nearly half of Crane’s currency business, and replacing the $1 note altogether would mean the loss of hundreds of jobs, the company said.
With Republicans in the majority, Frank is no longer the gatekeeper of the bills that reach the committee. Frank’s office did not respond to requests for comment.
Crane, which has spent hundreds of thousands of dollars lobbying for its cause in the past, is keeping a low profile now. Company officials said the GAO report was deeply flawed and is counting on those errors to speak for themselves.
“Anyone who has read that full report comes away shaking their head,” said Peter Hopkins, a spokesman for Crane. “We are asking Congress to get beyond the cover page.”
“Maybe that’s a touch naive,” he added.
Pretty much every industry involving coin-operated machines, from the subway to the arcade, prefers the dollar coin. The vending machine industry says it loses $1 billion annually to jammed bills, and 19 of the nation’s 20 largest mass transit systems accept coins because they say processing bills is six times more costly.
Before the establishment of the alliance in December, the copper and brass companies that would produce the new coins were engaged in independent campaigns to promote the coin. From 2006 to 2010, PMX Industries Inc., an Iowa-based copper supplier, for example, spent an average of $300,000 every year lobbying Congress, the Treasury and the U.S. Mint.
Still, previous attempts to transition from the bill to the coin have fallen flat largely because the coin just cannot compete with the familiar bill if they are both in circulation, government officials and industry representatives say.
Congress has repeatedly tried to increase use of the $1 coin, following the lead of other countries that have abandoned the paper single such as Canada, Australia and Japan. In 1997, Congress approved the creation of the Sacagawea coin, which was minted from 2000 to 2008.