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Cheaper penny and nickel? Lincoln and Jefferson may get a cheap face lift

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ThinkstockThe Dept. of the Treasury is looking at changing the mix of metals used to make pennies and nickels in a cost-savings effort.

A cheaper penny and nickel appears to be a plan of penny-pinching President Obama, who floated the idea Tuesday of using alternative metals to make penny and nickel coins.

According a Reuters report as carried by MSN Money yesterday, the cost of manufacturing these staple coins is twice what they are even worth. The Obama administration pegged the cost of making a penny at two cents; a nickel costs 11 cents.

Obama’s fiscal 2015 budget, released yesterday, says that the Treasury Department has not made any alterations in their manufacturing and circulation of the one and five cent pieces in over 30 years.

Because the U.S. Mint is losing money every time they press out a new coin, Obama has suggested they change the “recipe” for the dime and penny, especially considering the whopping costs incurred.

Last fiscal year, the U.S. minted 4.3 billion pennies and 914 million nickels. The total value of these coins then would be just under $89 million, while the cost to produce them comes in at a massive $186 million – not a very cost effective endeavor by any definition.

CNN Money says that even though the price is high, a practical mix may not be feasible. The Treasury has been “studying new metals since 2010, it has yet to come up with a workable mix that would definitely be cheaper, and it has no details yet as to what metals should be used or how much it would save to do so. “