When I look at the long-term trends of democratic countries — countries that I define by having free and fair elections for leaders — I see historical movement towards more “socially economic” values.  For instance, when I look at European countries that were founded much earlier than the United States I sense a pattern of less self-reliance among individuals and more social equality of government than one might see in the United States.

I’m not taking a pro or con viewpoint of that — it just seems like reality to me.  I traveled first to Europe in 1991 and it was on that trip that I noticed some of the differences between the countries I traveled in and the United States.  Once of the things that stood out to me was a sense of self-reliance being chipped away at over the years and replaced by a sense of a greater societal care in these countries with longer histories than the United States.

I think that is easy to see when you look at health care or higher education.  While there are good things and probably not so good things about social health care, the reality is that democracies that have been a round a long time seem to operate with that type of health care system.  The United States, which will turn 250 years old next year, still operates its health care system in a quasi-free market system.  And, I think, not necessarily for the better, some day that will change.

I have this vision of societies as they change.  The vision is that of a rock — in America’s case maybe it is Plymouth Rock.  As the years go by that rock gets pieces of its original values “chipped off” by government legislation.  And, when those pieces get “chipped off” they can never be put back in place again. . . . Again, for good or bad, the rock, or country, is never again the same as when it began.

As America moves forward I can envision some of our voters determining that Death Care expenses should not be a part of self-reliance of citizens but a social benefit of living in this democracy.  There is, by some, a foundational value that encourages costs to be shared by all.

While we have a $255 death benefit throught Social Security (you can read about that history here), just last September Senate File 5178 was introduced into the United States Senate.  That bill, which appears to be either held up in committee at this time, suspended because of the new congress, or simply forgotten because it was an election year ploy, was co-sponsored by two of America’s best known social-leaning senators — Sen. Elizabeth Warren of Massachusetts and Sen. Bernie Sanders of Vermont.

That bill would amend the Social Security Act to include a $2,900 death benefit, increased annually by the Consumer Price Index, from the current $255.  You can learn more about the bill here.

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  I think that the idea of this bill shows a little about what is wrong with American government.  Everybody wants a benefit, especially when society pays for it. . . .and for politicians, giving benefits can get votes. . . . (Check the timing on the aforementioned bill, S. 5178 — it was introduced and received publicity just six weeks prior to the 2024 Presidential election).

One problem with this type of solution, in addition to the possible reasons for the timing of the introduction, in America is that the amount suggested, $2900, then becomes a subtle suggestion to a financial number that many may believe is the price they should pay for services.  With the current $255 benefit, the number is small enough that nobody believes that they can get services for that price.

I hope it doesn’t happen but I can see, and this introduced bill indicates, that there seems to be solutions in search of problems in Washington, DC.  However, I see the eventual passage of items like this as our country grows older and many of our residents believe in “Social economics” rather than “self-reliance” for their economic well-being.

Maybe I’m wrong, but market pricing and market solutions are a far better world for the Death Care profession to live in than one that is operated with government subsidies, payments, and increasing government regulations.

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It’s been almost 100 years since Franklin D. Roosevelt signed the Social Security Bill into law in 1935.  And, contrary to what most people believe, there was a “Lump Sum Death Benefit” (LSDB)  applied to that bill that took effect at that time.  However, the original LSDB was discontinued in 1939 at a time when the maximum payment was $315. . . which you can see was more than today’s standard (and maximum) $255 benefit.  The average Lump Sum Benefit in 1939, however, was approximately $97.

The Lump Sum Death Benefit was reinstated in 1954, but with the maximum benefits capped at $255.  There have been other minor changes to the law since that time, but the maximum benefit has remained capped at $255.

That may all change if Senate Bill #5178 introduced by Senator Peter Welch of Vermont on September 25, 2024, makes its way into becoming a law of the land.  The bill, co-authored by Senator Bernie Sanders of Vermont and Senator Elizabeth Warren of Massachusetts, is titled “A bill to amend Title II of the Social Security Act to update the amount of Social Security lump sum death payments and index lump sum death payments to inflation”.   You can follow the bill from this website.

This article from CNBC gives us some more information on the proposed legislation.  In it, bill author Senator Welch makes these statements:

• “The change is aimed at helping to alleviate the financial burden for families following the loss of a loved one”
• “Funeral costs should be the last thing on the minds of grieving families when they lose a loved one”
• “. . .because benefits designed to help folks afford funeral expenses haven’t kept pace with inflation, the cost of burying a loved one has become top of mind for many mourning families”

The CNBC article also tells us that the terms of the bill call for a $2,900 death benefit that would start as early as 2025.  That amount would then be indexed for inflation similar to the Social Security cost-of-living adjustment (COLA).

The history of Social Security

The history of the Social Security Lump-Sum Death Benefit

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  At first this looks like a boon for funeral homes and families where they would have more money to take care of Death Care expenses.  However, before this bill becomes law there are plenty of hoops to pass through, including wondering how it would be funded by the United States Government.

And like many consumers will do, I just Googled “Cremation costs in Minneapolis”, which is the nearest large city to my residence.  Google told me that the costs would be between $1,875 to $2,995.  I’m guessing that upon examination that those prices would be for some variant of what I would call a Direct Cremation with No Services (DCNS).

What worries me some, and I can see this happening because those quoted cremation cost service dollar numbers are less than the proposed Social Security benefits according to S.5178, is that we would see a proliferation of television or streaming advertisements that would announce from companies that DCNS services would be done at “no cost to the consumer”.  The catch, of course, is that those services would be done with the thought process that the client family would sign the lump-sum death benefit over to the provider. . . .and with the benefit indexed for inflation, this business practice could well continue.

So, at first thought without doing a complete study of the situation, I’m not so sure that this would be a great idea for traditional funeral homes with a high cost of overhead at this time nor would competition advertising those practices be good for traditional funeral homes.  From my point of view, I’m guessing that revenues per service, in total, would head downward because of this type of practice.

On the other hand, looking at it from a consumer’s perspective, it is an additional immediate help of more than $2,600 in benefit than is received at this time.  It’s hard to argue that would not be a good thing for a consumer.

It’s notable that these senators want to help citizens pay off the costs of death care.  However, it is also notable that the bill was entered in September of an election year and that it can be used as a populist benefit but potentially never get pushed through the Senate once the election is over.  It’s difficult to know the exact intent of why it was put into play at this time. . . .

Final Thoughts:  I’ve been fortunate that I’ve had a few friends who have served as United States Congressmen and/or United States Senators.  One of them who I still see from time to time is former U.S. Congressman Vin Weber of Minnesota.  (Vin Weber bio)

I can remember having talks with Congressman Weber in the 1980’s or 1990’s about Social Security and the SS LSDB.  What I vividly remember from those talks is how he told me that Social Security was an incredible insightful program began in the 1930’s with one major flaw  —  that flaw was the actuarial tables at that time never “correctly” took into consideration how long we would live. . . . that mistake has flawed Social Security almost since its inception.

According to Google AI, life expectancy for United States men in 1935 was 61.7 years of age and benefits from Social Security did not start until age 65.  Life expectancy for women at the time was 65. . . So, from those age estimates you can see that most citizens would never live long enough to receive benefits and even if you got to the benefit age, you did not collect benefits for very long.

Life expectancy today is 77 years for men and 80 years for women and the basic age of early benefits has been lowered to 62.  i.e. most people now live to collect the benefits and actually collect benefits for a very long time.

According to then Congressman Weber, it has been this actuarial mis-calculation, in addition to benefits added to the program that were never part of the original calculations, that has brought on many of the problems with the deteriorating Social Security benefit system.

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