The Biden Administration plans to have the Federal Emergency Management Agency cut $9,000 checks to the survivors of Covid-19 deaths to pay funeral expenses. That's nice but I have a better idea. Why don't we do something about Social Security's absurdly low $255 death benefit? It's so low it probably costs more to administer than is paid in benefits. Covid survivors aren't the only ones facing difficulties paying funeral expenses. It's a common problem.
Let me make it clear to any unsophisticated reader of this blog that it isn't the Social Security Administration's choice to pay only a $255 death benefit. That was passed by Congress many, many years ago and the agency has no authority to deviate from it. The $255 payments were inadequate at the time Congress added the benefit to Social Security and they were never indexed for inflation.
12 comments:
Now you want SSA to be life insurance too? Who are you going to tax for that? We are down to about 3 workers for every single person on benefits.
@9:49
SSA is already life insurance in the amount of $255. As to who would pay for an increase through taxation, I expect the most efficient way would just to increase the payroll tax which is split 50/50 between worker and employer, raise the cap, or preferably both. As to the ratio being around 3 workers per beneficiary, that's true, it's 2.8. It's been 3.2 or less since 1975. If you have a serious concern with this ratio, setting aside the fact that it's been relatively stable for nearly half a century, we should declare gig work disguised employment and require the employers (uber, lyft, door dash, etc.) to pay payroll tax on their employees.
11:11 Two words....Soylent Green
A cremation can cost a few hundred dollars to well over ten thousand dollars. The average direct cremation cost in the United States is $1100.
At one time, the LSDP was $255 or 3X the deceased person's PIA.
https://fas.org/sgp/crs/misc/R43637.pdf
If you want to be buried, buy life insurance.
The fiscally responsible position would be to eliminate the LSDP. Congress has not and will not touch it.
The LSDP should be discontinued all together as it shouldn't be the taxpayers responsibility to pay for everyone's funeral. There are a multitude of burial life insurance policies that are very inexpensive. People should make sacrifices to obtain a policy if there wont be funds available at their time of death. And yes, you are absolutely correct that the cost to administer must exceed the benefit itself. Not to mention that there are several options, including cremation and green burials, that save thousands and are well below $9k.
@11:11 where is the "like" button on this forum, with respect to proper treatment of so-called independent contractors throughout the economy who then turn around and bewail a lack of services? I'm looking at you, construction contractors, tipped servers, nannies -- everyone who thinks they've beat the system by going independent (while young and healthy) only to learn too late that America's watered-down socialism is actually about what they needed.
11:11 here.
@3:51
The fiscally responsible position would be to maintain the LSDP because it results in quick reporting of a death to SSA, avoiding months or even years of benefits being deposited into deceased individuals accounts, benefits which usually (but not always, and certainly not always fully) are recouped through the overpayment process. Not that I'm encouraging being fiscally responsible; I think the program should be expanded, but eliminating the LSDP would likely be a net loss.
@4:17
The LSDP comes out of the OASDI trust fund, like DIB or RIB benefits. OASDI is funded through payroll tax contributions. The worker paid for the LSDP through their payroll tax contributions. The "taxpayer" is not paying for other peoples' burial, they (or their estate) are receiving a partial return of funds already paid into the program.
@4:54
Thanks!
I always love that line, "return of funds paid into the system" I put it up there with "Read my lips, no new taxes" oldie but goodie "the check is in the mail" and the recent hit "the election was stolen."
Can't have the LSDP be too high, or people will start killing each other for it. Factz.
Ever heard of cremation?
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