Hegseth supports bill eliminating offsets for combat-disabled military retirees

Defense Secretary Pete Hegseth has thrown his support behind proposed legislation that would give combat-wounded service members who are medically retired from the U.S. military their full retirement pay and Veterans Affairs disability compensation.

During a hearing Thursday on the Defense Department’s $1.5 trillion fiscal 2027 budget request, Hegseth said he supports the Maj. Richard Star Act — a bill that would give roughly 54,000 veterans their retirement pay and VA disability concurrently.

“As I have said in the past to other organizations, we support the Richard Star Act,” Hegseth said during questioning by Sen. Richard Blumenthal, D-Conn.

Blumenthal is a lead sponsor of the bill who repeatedly has tried to pass the legislation, most recently, calling in March for a Senate vote. The legislation has the support of 79 Senators and 323 House members.

But it has been blocked by some Republicans over concerns of funding. In March, Sen. Ron Johnson, R-Wisc., objected to Blumenthal’s call for a floor vote, saying the legislation would cost more than $70 billion over the first 10 years of enactment.

The $70 billion Johnson cited is the total estimated cost of eliminating the offset for all 250,000 military medical retirees, and according to the Senate Veterans Affairs Committee, the Richard Star Act only applies to medical retirees eligible for Combat Related Special Compensation.

Under those requirements, the committee estimates it would cost $11 billion over 10 years.

The legislation is a top priority for major veterans groups including the Veterans of Foreign Wars and Disabled American Veterans.

Because of its cost, under current congressional rules, lawmakers must find a way to pay for it. One proposal set forth by the VFW is to use the federal Military Retirement Fund, which finances military retired pay and has more than $1.7 trillion in assets.

The legislation was named for Army Reserve Maj. Richard Star, who died in 2021 from lung cancer after being exposed to burn pits in Iraq and Afghanistan.

Since 2004, veterans who earned military retirement for serving at least 20 years and who quality for VA disability benefits receive full pay for both if they have a disability rating of at least 50%.

But veterans who retired early from service as a result of military injury or illness are subject to dollar-for-dollar offsets in their military disability and VA disability benefits, sometimes amounting to thousands of dollars in lost income.

Blumenthal implored his fellow legislators to support the bill.

“It will eliminate this wounded warrior tax,” Blumenthal said.