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By Suzanne Blake
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One of the nation’s largest veterans advocacy organizations is warning Congress that a sweeping new benefits package could impose steep long-term costs on millions of former service members.
The Veterans of Foreign Wars (VFW) called the proposed changes under the Take Care of America's Veterans Act, a broad legislative package that includes the bipartisan Major Richard Star Act, as a “serious problem” for the future of disability compensation.
“Congress has introduced the Take Care of America's Veterans Act, legislation that includes many provisions the Veterans of Foreign Wars (VFW) has fought for and supports. But there is a serious problem,” the VFW said in a new action alert on Friday.
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“To pay for those benefits, Congress would codify previously proposed VA disability rating cuts for tinnitus and sleep apnea,” the organization added, saying these changes could reduce disability compensation payments by approximately $57 billion over 10 years and affect up to 1.5 million veterans.
Newsweek reached out to VFW for further comment.
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Why It Matters
For millions of veterans, disability compensation is a primary source of income and tied directly to injuries or conditions they developed due to their service. Changes to how those disabilities are evaluated, particularly for common conditions like tinnitus and sleep apnea, could bring along major financial consequences.
In the short term, thousands of combat‑injured veterans could see significant increases in income if long‑sought reforms like the Major Richard Star Act pass. Because VA rating schedule changes typically grandfather in veterans with established ratings, these proposed cuts would target future claimants and those seeking rating increases. Still, a much larger group of veterans could face reduced disability ratings or lower compensation, depending on how the new rules are applied.
The Funding Offset Controversy
The VFW's objection centers on the bill's funding mechanism. The legislation aims to finance the Major Richard Star Act, which would permit certain combat-injured veterans to concurrently receive full retirement pay and disability compensation. According to the Star Act Alliance, the Major Richard Star Act would benefit roughly 54,000 combat-injured veterans who were medically retired before reaching 20 years of service, allowing them to receive an average of $1,200 more per month.
- Current Law: Under existing statutes, some medically retired veterans must forfeit a portion of their retirement pay to offset their disability benefits. The proposed bill eliminates this offset.
- The Proposed Offset: To fund this expansion, lawmakers propose revising the rating criteria for conditions like sleep apnea and tinnitus, thereby reducing future expenditures. The new criteria would end standalone disability ratings for tinnitus, folding it into general hearing loss. For sleep apnea, the changes would eliminate the automatic 50 percent rating for veterans requiring a CPAP machine, instead basing the rating on how well the condition is managed by the device.
“Removing or scaling back compensation for conditions such as sleep apnea and tinnitus could generate more than $50 billion in savings over the next decade, but that savings comes directly at the expense of veterans dealing with those conditions,” Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek.
The VFW estimates the long-term impact could affect between hundreds of thousands and over 1 million veterans.
VFW Campaign: ‘Honor the Contract’
In response, the VFW has launched a campaign urging members and supporters to contact lawmakers to demand revisions to the bill. The organization argues the legislative framework violates the core principle that existing veterans' benefits should not be compromised to fund new initiatives.
“The VFW refuses to accept the idea that one group of veterans must lose so another group of veterans can win. Veterans' benefits are not charity,” the VFW wrote in its warning. “They are an earned obligation of the nation and part of the promise made through military service. Congress should Honor the Contract.”
Advocates stress that these structural adjustments introduce long-term financial volatility for households dependent on stable disability ratings.
“If you're managing household finances around a specific disability rating, and that rating suddenly drops, you're not just losing money today,” Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, told Newsweek. “You're losing purchasing power in retirement when you can't easily go back to work and replace it. That's the financial reality policymakers aren't talking about.”
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Broadening Opposition and Congressional Debate
The VFW’s concerns are shared by other major veteran service organizations, including Disabled American Veterans (DAV), as well as several congressional lawmakers.
DAV has argued that Congress should not force veterans to compete against one another for benefits.
"This 'poison pill' was included in a larger veterans package that includes a number of key DAV priorities," DAV National Commander Coleman Nee said in a statement on Wednesday.
He noted that the package contains several measures long supported by veterans groups, including expanded caregiver support, higher survivor benefits, improvements to prosthetic equipment and increased compensation for catastrophically disabled veterans.
However, Nee argued that lawmakers are using future benefit reductions to satisfy budget rules known as PAYGO, which generally require new spending to be offset elsewhere.
“While we appreciate all good faith efforts to develop and enact a package of positive veterans legislation, we reject the premise that the only way to fulfill the promises made to the men and women who served in the past is by cutting benefits for veterans in the future,” Nee said.
Some Democratic lawmakers have also expressed reservations regarding the equity of the bill's offset structure. Senator Richard Blumenthal, the top Democrat on the Senate Committee on Veterans' Affairs, criticized the package for potentially disadvantaging the broader veteran population.
"Correcting this injustice for combat-injured veterans should be done without depriving other veterans of benefits they need and deserve," Blumenthal said in a statement.
Altogether, the proposal could create a system where a smaller group of combat-injured veterans sees increased benefits and a much larger group faces reduced eligibility or lower compensation in the future.
But other lawmakers say that some form of offset will be necessary to move some of stalled legislative changes forward.
"For five years under Republican and Democratic leadership, the Major Richard Star Act has been unable to pass either House or the Senate in significant part due to the inability to offset the cost of the legislation, something required by law," Republican Senator Jerry Moran, who sponsored the bill and is chair of the Senate Committee on Veterans' Affairs, said. "We can either continue to encounter this same roadblock, we can do this over and over and over again and see the same result, or we can work together to address the concerns that have prevented this bill from passing for the last 5 years.”
When contacted for comment, Moran’s office emphasized that the eligibility revisions would apply only to future claims and would not reduce existing disability ratings or eliminate compensation for tinnitus or sleep apnoea overall.
What Happens Next
The legislation is still moving through Congress and has not been finalized.
It’s unclear if lawmakers will remove or revise the offset provisions and how many veterans could ultimately be affected.
“For disabled veterans, VA compensation isn't a one-time benefit, but a core pillar of retirement income,” Ryan said. “These cuts don't only affect a paycheck this month but ripples through 20, 30, sometimes 40 years of retirement planning.”
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