Judd Gregg: A little change

In the parlance of Congressional budgeting, if you have an idea that scores positively — in other words, if it raises money without raising taxes — you have struck gold.

Such an item allows you, should your colleagues accept it, to either reduce the deficit or spend money on some program that has general support but no funds to pay for it.   

{mosads}Expressed another way, if something scores positively, it creates opportunities for action by the Congress. And this is particularly appealing because Congress is generally wedged into a straitjacket of inaction when it comes to new initiatives or reducing the deficit because it has no way to pay for either effort.

Here is an idea that involves small change but translates into budgeting gold.

It is currency modernization.

Our present currency system is illogical. We produce coins that cost more than they are worth. Yet, at the same time, we rely far more excessively than other industrialized nations on paper currency. We simply have not modernized our approach to managing our currency to catch up with a 21^st century market society.   

It is a bit embarrassing to have the world’s largest and most important economy but yet be so far behind our competition in the simple act of managing our physical money.

On the bright side, some moves are being made toward addressing this problem. If those moves translate into real action, we stand to realize benefits both from making day-to-day economic activity more efficient and rational, and from saving the taxpayers considerable sums.

The Treasury has announced sweeping changes to our paper currency. The Government Accountability Office (GAO), the Congressional audit group, has supported major modernization ten times in the last 25 years.

Most importantly, a group of thoughtful and respected legislators led by Sens. Mike Enzi (R-Wyo.) and John McCain  (R-Ariz.), and Reps. Kyrsten Sinema (D-Ariz.) and Robert Pittenger (R-N.C.) have made fixing our currency system a priority.  

They are pushing for a dollar coin to be included in a package of GAO-recommended savings measures with their bill, The United Savings and Accountability Act (USA Act). 

Enzi, the chairman of the Senate Budget Committee, has also pushed to make sure that savings generated from this modernization will be able to be scored in the budget process.

A majority of the American people likes this reasonable approach. Sixty-one percent of Americans support going to a more coin-dominated system when they are told of the savings it would generate.

How much would this currency reform save us?

It is estimated that switching from the one-dollar note to a one-dollar coin could save the country up to $13.5 billion. Additional savings could be made from suspending the production of the penny and redesigning the nickel. This is a lot of money that could go to reducing the deficit or to funding programs that have broad bipartisan support.

Canada, our neighbor to the north and a good place to try out ideas like this, has successfully made this switch. Canadians experienced cost savings ten times higher then their initial estimates.

In an election year like this, big things are not going to happen in Congress. But positive, incremental initiatives that can help pave the way for broader reforms of budget and governance should be doable.

Currency modernization is an opportunity to get real savings that can be used by this Congress as it wrestles with paying for government and reducing the debt. 

It is a small change, in small change. But it does score positively, so it is actually a fairly big deal for a Congress that urgently needs some change.

Judd Gregg (R) is a former governor and three-term senator from New Hampshire who served as chairman and ranking member of the Senate Budget Committee, and as ranking member of the Senate Appropriations Foreign Operations subcommittee.