It’s Official: Obama discontinues the penny.
President Obama is continuing in his frantic attempt to leave a significant legacy to his presidency by announcing the termination of a penny a legal tender in the United States. The executive order is effective the day after Christmas, 2016. The Federal Banks will accept pennies that are turned in for other currency through December, 2017.
The President has had frustrations in trying to leave substantial legacy items from his administration. The Affordable Care Act, otherwise known as Obamacare was expected to be the signature legislative act of his administration. However, the Act is hobbling under today’s announcement that enrollment is far below expectations and insurers are losing literally billions of dollars under the plan. Large insurers are abandoning the plan’s exchanges in many states leaving many customers only one plan to choose from. Blue Cross of North Carolina, an insurer in a single state, has lost $400 billion in a single year. Some states are seeing price increases of over 60 percent. So this legacy item is limping into the end of Obama’s term.
He is also doing all he can to close the Prison at Guantanamo. He has an ideologically driven point of view that this Prison is a recruiting tool for ISIS. There has never been a single Islamic Jihadist who has testified that he joined because of Gitmo. So the next few months will see the release of 62 of the most heinous enemy combatants that we still hold.
He is still claiming victory in the nuclear deal with Iran even though Iran has humiliated him by capturing US Navy personnel and filming their mistreatment. Iran also pulled $400 million in cash on pallets from Obama to release 4 US citizens that were in their prisons. Since then they have captured 3 more US citizens. The Iran nuclear deal includes secret side deals that the American public may not know until decades have passed.
His one victory that still remains untarnished is the killing of Osama Bin Laden. The night he announced that accomplishment, even his most vocal political opponents paused to celebrate bringing this villain to justice.
So, as strange as it may seem, when people over the next few decades think about what President Obama accomplished, the elimination of the penny may be at the top of their lists. It is obviously practical, with a penny now costing more than a penny to manufacture. Many people do not even bother to pick a penny up from the sidewalk because it is not worth the effort. Men complain that pennies wear out the material in their pockets and women complain about the weight in their pocketbooks.
It is expected that retailers will use the elimination of the penny as an excuse to round their prices upward. However, the amount is so small that no impact is expected on the Consumer Price Index. It seems ironic, but the biggest financial impact will probably be felt by the cities and states because the sales taxes will also be rounded up. Since the sales taxes are individually smaller than the purchases, a rounded up increase of a few cents is a larger percentage on the smaller base. Ironically, even without trying, this last act of Obama’s will increase taxes in a regressive tax on the lower and middle class.