This week, two Members of Congress – Rep. Ted Deutch (FL-21) and Sen. Mark Begich (AK) – re-introduced the Protecting and Preserving Social Security Act (H.R. 649 and S. 308), a bill that would base the calculation of Social Security COLAs on the Consumer Price Index for Elderly Consumers (CPI-E), and gradually eliminate the cap on income subject to the payroll tax. .Sources: "Divided Deficit Panel OKs Proposal," John Maggs, Politico, December 3, 20"The Moment of Truth" The National Commission on Fiscal Responsibility and Reform, December 2010. .The Centers For Medicare and Medicaid Services (CMS) recently announced a bold new model to save money and improve healthcare quality by changing the way the government pays doctors. The Administration is taking steps to ensure that, by 2018, up to half of all payments to doctors won't be for visits and procedures, but rather for providing "high quality" care. The plan is to pay doctors on how they perform. .Let's consider what the I.O.U.s held by Social Security represent. The I.O.U.s are bookkeeping entries, a lot like entries in checking accounts, but are not represented by real cash sitting in a strong box anywhere. The U.S Treasury collects Social Security payroll taxes from employers. In turn, the U.S. Treasury issues I.O.U.s to the Social Security trust fund. In the meantime, those payroll taxes are immediately used for other federal budget operations. When more payroll taxes were collected than needed to pay benefits, that reduced the amount of borrowing from the public that was needed for the general revenues, and lowered taxes. Now, however, the situation has reversed, and the Treasury must increase borrowing from the public to redeem the I.O.U.s held by the trust fund in order to pay benefits. Increased borrowing, and the cost of interest on the debt, further drives up our federal spending. According to many economists, that can weaken our economy, and our nation's ability to respond to a crisis. .There are, however, a number of ways that unauthorized workers can, and do, become entitled to benefits based on illegal work (see our "FAHow "Undocumented" Workers Are Becoming Entitled To Social Security" from the May 2012, Volume 17, Number 4 issue of The Social Security & Medicare Advisor. Despite a 2004 law forbidding illegals from claiming Social Security benefits, they are able to do so if at some point their status changes and they receive work authorization — as would happen under an amnesty. With work authorization, noncitizens can file a claim for Social Security benefits. Under current law when determining entitlement for benefits, Social Security uses all earnings for calculating the primary benefit amount, even if the earnings were for unauthorized work using fraudulent documents. All the individual needs to do is to supply evidence of the earnings, such as old W2s, and earnings in the ESF file would be "reinstated" to the account of the claimant. .This week, The Senior Citizens League was pleased to see support grow for three bipartisan bills that would improve the Medicare program and reduce prescription drug prices. .The Social Security cost-of-living adjustment (COLA) is provided to protect the buying power of Social Security benefits from rising prices. Yet for almost a decade, retirees have had to manage their household budgets despite COLAs that have been at unprecedented lows. During this period, typical retiree costs have continued to rise several times faster than overall inflation and, consequently, Social Security benefits have lost one-third of their buying power since 2000. .Editor's note: While I have a pretty reliable track record on estimating the COLA, this year's inflation is far different than at any previous time in the past 26+ years. Inflation has been so volatile that I worry my probability models may not work as well as they typically do. In most years I'm pretty certain about my September estimate of the COLA for the following year. But this time all bets are off. Be patient — I'm no psychic, and stay tuned to the news! .Additionally, in less than two years, the Social Security Disability Insurance trust fund will become insolvent, and approximately 11 million beneficiaries will be faced with a 20 percent cut in monthly benefits. Many lawmakers are hoping to divert funds from the retirement trust fund in order to address the funding shortfall, but according to our recent survey results, less than 1 percent of seniors support this method. Instead, TSCL will be advocating for policy solutions that would tighten the eligibility requirements for the Disability Insurance program and ramp up efforts to fight fraud, waste, and abuse.