Dollar Fight Is Paper Vs. Metal
Money may talk, but its makers yell.
Crane & Co., the Massachusetts-based company that provides the paper for the nation’s currency, is rushing to the defense of the greenback now that Congress might actually eliminate the dollar bill.
In the past several months, the company has tripled its lobbying expenditures, brought on a new team of lobbyists and helped plaster Washington, D.C.’s Metro Center station with advertisements — the political equivalent of a shriek.
With legislation to eliminate the dollar bill in favor of a dollar coin gaining traction in both chambers, the parochial tug of war between paper and copper has become an increasingly public battle.
Even the Obama administration’s decision to halt the production of new coins in mid-December did not stop both sides from pouring more money into lobbying, polling and advertisements.
Crane, which moved sluggishly at first, paying one lobbyist just $20,000 to fight the bills in the first half of 2011, spent an additional $60,000 from July through December. Last month the company hired Gephardt Government Affairs, led by former House Minority Leader Dick Gephardt (D-Mo.), which plans to field a team of four lobbyists, according to federal filings.
Paper is not the only player. Sicpa Securink Corp., a Swiss-based ink company that supplies the ink for paper currency around the world, also paid the same four lobbyists more than $300,000 during that time period to fight the proposals. The company did not return Roll Call’s request for comment.
The push for a dollar coin has been going on for decades among fiscal hawks focused on replacing paper dollars, but the movement has gained fresh momentum amid growing alarm over the federal deficit. Supporters argue the change could save the government hundreds of millions of dollars, and they have aggressively fought opposition in Congress, especially from Massachusetts Sens. John Kerry (D) and Scott Brown (R).
In January, Sens. Tom Harkin (D-Iowa), John McCain (R-Ariz.), Tom Coburn (R-Okla.) and Mike Enzi (R-Wyo.) introduced a bill to phase out the paper dollar and replace it with the coin. A House version of the bill, introduced in September by Republican Reps. David Schweikert (Ariz.) and Jeb Hensarling (Texas), now has 12 co-sponsors.
The movement is largely the work of the Dollar Coin Alliance — a coalition of brass and copper producers and coin-operated machine companies — and its public face, former Rep. Jim Kolbe (R) of Arizona, the country’s largest supplier of copper, who introduced similar legislation at least five times during his career. The group spent almost $700,000 lobbying Congress in 2011.
Crane and other companies involved in greenback production kept a low profile until this fall, when they set up a counter coalition dubbed Americans for George.
“With [Kolbe’s] strong relationships and ties they are able to push bad legislation along,” said Doug Crane, Crane’s vice president. “We needed to get the word out better than we had been.”
One-dollar notes represent nearly half of Crane’s U.S. currency business, and replacing them altogether would mean the loss of about 350 jobs, said Crane, who planned to be in Washington, D.C., today to attend a House Financial Services subcommittee hearing on the future of currency.
Randy DeCleene, a spokesman for Americans for George, said the group is considering placing more advertisements in the districts of lawmakers who are supporting, or are considering supporting, the bills this spring. In the meantime, the group is pumping out favorable polls that show overwhelming public support for $1 bill.
“The general public had no idea that this was actually under consideration,” he said.
Coin supporters seem to have the Government Accountability Office in their corner. The office has issued six reports in the past 22 years concluding that replacing the dollar bill with a coin saves the government money because it costs less to produce new currency than it is worth.
Greenback allies point out that the switch would cost the government about $531 million in the first 10 years. They also note that the savings projected in the GAO’s February report — $4.4 billion over the next 30 years — are $1.1 billion lower than the office predicted last spring, in light of new data on the lifespan of paper notes. The Treasury Department now estimates that dollar bills last an average of 56 months, compared with the 30 years a coin lasts.
The Dollar Coin Alliance argues that its cause is stymied by a bureaucratic power struggle between Congress and the agencies that print and manage currency.
The Treasury Department and the Federal Reserve have long opposed making the coin the sole $1 product, citing its weight (just more than 8 grams), the public’s stubborn attachment to paper currency and the costs to the banking industry, retailers and others who would have to update their systems and practices if dollar bills were phased out.
But Congress can mandate the end of the $1 bill, and the Dollar Coin Alliance is heavily pressuring lawmakers to make the change.
The budgetary threats looming at the end of the year, including the impending $1.2 trillion sequestration and the extension of the Bush tax cut, could work to their advantage, said Shawn Smeallie, a lobbyist with American Continental Group who is representing the Dollar Coin Alliance.
“You have a triple witching hour coming in December,” he said. “I think they are going to be considering anything and everything at that point.”