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A Penny Saved, a penny earned

Jamie Fishman has a penchant for pennies.

The 8-year-old Charlottesville resident proudly stands in front of the Coinstar machine at the Harris Teeter supermarket on Emmet Street as the machine counts his pennies and dispenses a voucher that can be exchanged in the store for cash or groceries.

"Pennies are my favorite," Fishman says. "I like that they look different than the silver coins."

But if a congressman's anti-penny bill gets passed, Fishman won't be counting his copper anymore.

Last month, Rep. Jim Kolbe (R-Arizona) introduced the Legal Tender Modernization Act. He is the only sponsor of the bill, which would eliminate the penny by requiring retailers to round prices up or down to the nearest nickel. For example, items that cost $5.33 would be rounded up to $5.35. Goods costing $5.32 would be rounded down to $5.30. Although the penny would still be legal for credit card and money order exchange in exact amounts, all cash transactions would be rounded.

"People just stick pennies in jars and hoard them," said Neena Morjani, Kolbe's spokeswoman. "There's less demand these days so the Mint has to pay more."

Public reaction has been mixed.

Jan Feinberg, president of the World Penny Games Association President is not pleased. Last year, his Ohio-based company sold over 200 penny hockey game boards, wooden boards designed for the sport that uses pennies as hockey pucks.

"It takes three pennies to play my game, so I guess I'd have to change the name of my company," he said. "It might be a problem."

Coin collectors aren't as worried.

"Sure it can happen but it seems unlikely," said American Numismatic Society spokesman Keith Sherman. The coin collecting and research group is involved has members in 42 states, including Virginia.

"But a lot of us started our collections with pennies. We all remember walking around with too many pennies in our pockets as kids."

With its 99-cent Supervalue menu, Wendy's also refuses to fret just yet.

"We don't think it would make much impact on the perception of our Supervalue menu," said Bob Bertini, Wendy's spokesman.

"But operationally, I don't know whether it would cause a problem."

Opponents like the Washington, D.C.-based Americans for Common Cents are up in arms. The penny lobbying coalition consists of 50 organizations that support the penny or benefit from it, such as charities and zinc producers.

"There is no reason to get rid of the penny," said Mark Weller, the executive director of the group.

Weller said poor people and charities who save spare change would be hit the hardest, and the bill would create "what amounts to a $600 million `rounding tax'" for all consumers. In other words, since most stores will round prices up, rather than down, Americans as a whole would have to pay an extra $600 million out of their pocket.

"It's very clear that Americans want to keep the penny," he added.

Polls by CNN and Weller's group reveal that 60 to 70 percent of Americans don't want to lose the coin.

And last month the Bellevue, Wash.-based Coinstar released a similar poll that revealed 65 percent of Americans want to keep the coin.

These results are why Coinstar spokeswoman Michele Avila isn't too concerned about the bill. The company has four machines in Charlottesville grocery stores.

"We're neutral; we'd support whatever Congress decides," she said. "But people do seem very attached to the penny."

According to Kolbe, the Mint must spend over nine-tenths of a cent to make a penny, including transportation and distribution costs, but U.S. Mint spokesman Matt Kilbourne says a penny only costs 82 hundreths of a cent to produce.

"He has his number and we have ours," Kilbourne said. "But the penny is still profitable."

Although Kolbe believes the effort to make the coin doesn't generate enough profit, the Mint is hesitant to eliminate a coin that creates millions of dollars in revenue.

Kilbourne said sales of the cent brought in $29 million last year. In 2000, the Mint made 28.1 billion coins, 14.2 billion of which were pennies.

Besides the penny proposal, Kolbe's current bill also calls for designing commemorative two-dollar bills to be issued over a five-year period and prohibiting redesign of the one dollar bill. In addition, the measure would authorize the Bureau of Engraving and Printing to print currency, postage stamps and other documents for foreign governments.

But critics contend that Kolbe's real intent for the bill is to free up the Mint to make more Sacajawea dollar-coins. The congressman, whose state is the number one copper producer in the nation according to the Arizona Mining Association, always has supported the "Gold Dollar," which is actually 88.5 percent copper. Pennies on the other hand, are only 2.5 percent copper and 97.5 percent zinc.

"He just wants to make more copper coins," Weller said. "But right now the Fed has 200 million dollar-coins just sitting in inventory."

Kolbe disagrees. He says overseas U.S. military bases don't use pennies because they're too expensive to ship, and there haven't been any problems there.

In addition, countries like France, Britain and Spain, have stopped producing low-denomination coins because they have little purchasing power. The Euro, however, to be released January 1, 2002, does have a one-cent coin.

Of course, just because Kolbe has introduced the bill does not mean it will be passed.

"Mr. Kolbe has been in politics too long to make predictions," Morjani said. "There's no guarantee others will sign on"


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