The price of a penny stirs calls for steel

Currently, it costs the government about 1.3 cents to make a single penny. (Associated Press/File 2006)

WASHINGTON - The House has voted to bring back the steel penny, saying it would be cheaper to make. Currently, the government loses money on every one-cent coin it makes because of rising metal prices.

The bill would direct the Mint to begin producing, within nine months, pennies made out of copper-plated steel - not the zinc-copper alloy currently used. The measure also recommends the phasing in of steel nickels over the next two years.

Democrats, who noted that the government produced steel pennies during World War II, when copper demand was high, said the plan would save $1 billion over the next decade. Unlike the gray steel pennies produced during the war, the new steel pennies would retain their copper color.

"It is an insult to American taxpayers that we are manufacturing coins at a rate more than their face value represents," said Representative Zack Space, an Ohio Democrat.

The Senate hasn't taken up the matter.

The Bush administration opposes the plan. The Mint's director, Edmund Moy, said in a letter to the House Financial Services Committee's chairman, Barney Frank, a Massachusetts Democrat, that the agency is unsure steel pennies would be cheaper to produce and that it needs more time.

The Mint, which produces almost 8 billion pennies each year, says it now costs 1.3 cents to make a single one. That's up from the .97 cent-per-penny cost three years ago.

The mint hasn't tinkered with the metal content of the one-cent coin since 1982, when rising copper prices prompted it to replace pennies that were almost entirely copper with the mostly zinc ones now being produced.