Sen. John Kerry opposes a bill to phase out the $1 bill in favor of the coin version, which would endanger the Massachusetts company that provides the paper for the nation's currency.
Massachusetts Sens. John Kerry, a liberal Democrat, and Scott Brown, a moderate Republican, have at least one quest in common: saving the $1 bill and hundreds of jobs at a Bay State company that provides the paper for it.
Kerry, a member of the Joint Committee on Deficit Reduction, threw his weight last week behind a measure that would end production of the $1 coin, citing a $37 million annual savings. The legislation would also stymie efforts to replace the bill with the coin, thereby protecting Crane & Co., the company in Dalton, Mass., that provides the paper for the nation’s currency.
Both measures, introduced just four days apart, say they would save the government millions, if not billions, of dollars and could end up being considered by the deficit panel as it searches for $1.2 trillion in budget cuts. Neither bill has been scored by the Congressional Budget Office.
The Federal Reserve says it has more than $1.2 billion in excess $1 coins stored in its vaults and that by 2016 the government will have spent $300 million to produce a stash worth about $2 billion. On top of that expense, the Fed would likely need to build new vaults to house the unused — and unpopular — coins, Brown’s office noted.
Brown told the Berkshire Eagle newspaper that the bill he backs was designed not only to save taxpayer dollars, but also to save jobs at Crane. One-dollar notes represent nearly half of Crane’s currency business, and replacing them altogether would mean the loss of about 350 jobs, said Doug Crane, the company’s vice president.
He added that the firm did not send its lobbyists to push the issue with the state’s two Senators.
“There is an active group of folks who appear to be trying to force a coin solution on the American public,” he said. “But most people prefer dollar bills.”
Hensarling, however, has sided with a group of businesses and consumer advocates that have been pushing for a full switch to the dollar coin for years.
Previous attempts to transition from the bill to the coin have fallen flat, largely because the coin cannot compete with the familiar bill if both are in circulation, government officials and industry representatives have said.
But the increased focus on the federal deficit this spring gave the coalition — dubbed the Dollar Coin Alliance — new hope, which was augmented by a report from the Government Accountability Office that said phasing out the $1 bill could save the government $5.5 billion over the next 30 years.
The Treasury Department and the Federal Reserve have long opposed making the coin the sole $1 product, citing its weight (just over 8 grams) and the public’s persistent attachment to paper currency. But Congress can mandate the end of the $1 bill, and the Dollar Coin Alliance is pressuring lawmakers to make the change.
The group has spent more than $390,000 lobbying Capitol Hill since December. Crane has spent only about $20,000 on federal lobbying this year, according to lobbying disclosure reports.
“At a time when the super committee is looking for everything they can find for savings, here is something that doesn’t cut Grandma’s program and doesn’t raise taxes,” said former GOP Rep. Jim Kolbe of Arizona — the country’s largest supplier of copper, used in all U.S. coins. Kolbe introduced similar legislation at least five times throughout his career and now serves as a spokesman for the coalition. “The legislation by the two Massachusetts Senators ... is defiantly done with Crane paper in mind,” he added.
Correction: Sept. 27, 2011
An earlier version of this story misstated the co-sponsors of a bill that seeks to phase out the $1 bill.