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By Suzanne Blake
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A major labor coalition is warning that a new veterans’ benefits bill could strip or reduce disability compensation for up to 1.5 million veterans.
The American Federation of Labor and Congress of Industrial Organizations (AFL‑CIO), alongside at least 20 other labor groups, urged Congress to reject the sweeping veterans’ Take Care of America’s Veterans Act package, warning that key provisions could cut disability benefits for huge numbers of veterans.
“This legislation cynically packages long-sought, well-deserved new benefits for disabled veterans with benefit cuts to other veterans and a slew of provisions designed to further privatize the VA healthcare system,” the groups wrote in a letter sent on Monday.
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Why It Matters
For millions of veterans, disability compensation is a critical financial lifeline. Changes to how those conditions are rated, particularly for common issues like tinnitus and sleep apnea, could lead to reduced benefits or lower future payouts.
According to the letter, the legislation would eliminate or reduce compensation for those conditions as a funding mechanism, potentially cutting future disability payments by about $57 billion over the next decade.
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What To Know
In their letter, the unions representing hundreds of thousands of VA employees said they are strongly opposed to the legislation, saying the improvements for veterans under the bill come with harmful tradeoffs.
The bill would offset new benefits by reducing compensation for sleep apnea and tinnitus, two of the most common service‑connected conditions, and up to 1.5 million veterans could see benefits reduced or eliminated under the proposal.
Experts say the measure could also accelerate privatization of VA health care, shifting more services to outside providers.
“The bill expands benefits for some disabled veterans while cutting benefits for others, creating what many see as a zero-sum game,” Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek.
“Privatizing healthcare while increasing reliance on automation can lead to two troubling results: more denials and more referrals before care is approved, creating additional delays for veterans who need treatment.”
The Funding Debate
The controversy centers around how Congress intends to pay for the Major Richard Star Act, a bipartisan proposal that would allow certain combat‑injured veterans to receive full military retirement pay alongside VA disability compensation.
The labor coalition said lawmakers are attempting to fund that expansion by incorporating previously proposed rating changes that reduce disability payouts elsewhere.
“Veterans' benefit improvements should not be held hostage to reciprocal cuts and privatization,” the letter said.
Broader Concerns About VA Care
Beyond benefit reductions, the AFL‑CIO also raised alarms about provisions they say could deepen reliance on private-sector care for veterans.
Sending on community (non‑VA) care has already risen sharply in recent years, and roughly half of VA-funded medical care is now provided by external providers.
New rules could further shift resources away from the VA system.
“Supporters argue the VA has struggled to meet veterans' needs and that reform is necessary to move the ball forward,” Thompson said. “While that may be true, I am not convinced privatization is the answer.”
What This Means For Veterans
If enacted in its current form, the proposal could:
- Reduce or eliminate compensation for certain conditions like sleep apnea and tinnitus
- Affect future disability claims and reassessments
- Potentially shift more veterans toward private health care providers
However, some veterans, particularly combat‑injured retirees, could simultaneously see increased benefits under the Star Act provisions.
“The Major Richard Star Act would correct a longstanding inequity by allowing eligible medically retired veterans to receive both their military retirement pay and VA disability compensation,” Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek. "The concern is that the changes could be financed by cutting future sleep apnea or tinnitus benefits.”
What Happens Next
The legislation remains under consideration in Congress, where it faces a complex debate balancing the costs and benefits.
Lawmakers from both parties have supported parts of the package, particularly the Major Richard Star Act, but disagreements continue over how to fund it.
If the bill advances, the proposed changes to disability ratings would likely apply primarily to future claims.
“Expanding community care may improve access in some areas, but bypassing VA coordination and shifting funding to outside providers could present problems for treatment, especially for veterans with complex physical and mental-health needs,” Beene said.
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