Senate Dispute Over Veterans Bill Could Affect Disability Benefits

A major veterans benefits package has stalled in the Senate after lawmakers disagreed over how to pay for new benefits without reducing compensation for other disabled veterans. The dispute centers on the Take Care of America’s Veterans Act and its connection to the Major Richard Star Act, which would provide additional compensation to certain medically retired combat veterans. The funding disagreement is especially significant because a Republican-backed version of the package includes changes that could reduce future disability compensation for veterans with service-connected tinnitus and sleep apnea. 

The Senate Blocked a Proposed Path Forward

On July 29, 2026, Democratic Sen. Richard Blumenthal of Connecticut attempted to advance an amended version of the veterans legislation using unspent Department of Defense money to cover the cost of the new benefits. Senate Veterans’ Affairs Committee Chairman Jerry Moran, a Republican from Kansas, opposed that funding approach after saying the Congressional Budget Office raised concerns about whether the proposed transfer of defense funds would comply with federal law. Moran then attempted to advance the legislation using its original funding mechanism, but Blumenthal objected, preventing the bill from moving forward. 

The Major Richard Star Act Is at the Center of the Fight

The Major Richard Star Act is designed to address what supporters call the “wounded warrior tax.” Under current rules, some medically retired veterans who receive military retirement pay can have their VA disability compensation offset by that retirement pay. The proposed legislation would allow eligible combat-injured veterans to receive both forms of compensation, potentially providing thousands of dollars in additional annual income to veterans who were forced to medically retire because of service-connected injuries.

The Funding Dispute Could Affect Other Disabled Veterans

The biggest controversy involves how the cost of the new benefits would be covered. A Republican-backed version of the broader veterans package proposes using savings generated by changes to disability compensation rules involving tinnitus and sleep apnea. Critics say those provisions could reduce benefits for veterans who are already receiving or may qualify for compensation for those conditions. The Senate dispute therefore is not simply about expanding benefits, but about whether one group of veterans should receive new compensation at the expense of another. 

Tinnitus and Sleep Apnea Are Major Parts of the Debate

Tinnitus, commonly described as ringing or other persistent sounds in the ears, is among the most frequently claimed service-connected disabilities. Sleep apnea is also a significant source of VA disability claims, particularly among veterans who use continuous positive airway pressure, or CPAP, machines. Proposed changes could substantially alter how these conditions are rated for disability compensation, with critics warning that the impact could reach roughly 1.5 million veterans. 

The Proposed Cuts Could Reach $57 Billion

The Republican funding proposal has drawn particular criticism because advocates estimate that changes affecting tinnitus and sleep apnea could reduce disability payments by as much as $57 billion over 10 years. Supporters of the package argue that those savings could help finance expanded benefits for other veterans, while opponents say veterans who already qualify for compensation should not have their payments reduced to fund a new benefit. 

Critics Want Unspent Defense Money Used Instead

Blumenthal and other Democrats have argued that Congress could use a portion of nearly $100 billion in unobligated and unspent Department of Defense funds from the 2025 budget law to finance the veterans legislation. Blumenthal’s proposal specifically sought to redirect a much smaller portion of those funds rather than reduce disability compensation. Moran rejected that approach after citing concerns about the legal treatment of appropriated defense dollars. 

The House and Veterans Groups Are Also Watching

The dispute comes after months of disagreement over the veterans package in both chambers of Congress. The broader legislation has been described as a sweeping effort to expand and modernize veterans benefits, but disagreements over its financing have divided lawmakers and veterans organizations. Some advocates strongly support the Major Richard Star Act while opposing provisions they believe would reduce compensation for veterans with tinnitus and sleep apnea. 

What Happens to Disability Benefits Next?

The Senate dispute does not mean every affected veteran immediately loses disability compensation. Rather, the proposed changes remain tied to legislation and VA rulemaking, meaning the timing and final impact depend on what Congress ultimately approves and what rules the Department of Veterans Affairs implements. Veterans receiving benefits for tinnitus or sleep apnea should therefore watch official VA announcements and congressional developments rather than assuming their payments will automatically change because the Senate bill stalled. 

A Funding Fight Could Shape the Future of Veterans Benefits

The Senate’s latest dispute has exposed a difficult question for lawmakers: how should Congress expand benefits for combat-injured veterans without taking money away from veterans who already receive disability compensation? The proposed package could provide meaningful financial relief to medically retired veterans through the Major Richard Star Act, but its funding mechanism has generated fierce opposition because of potential changes to tinnitus and sleep apnea benefits. Until lawmakers agree on a funding solution and pass final legislation, the future of these proposed changes remains unsettled, leaving veterans and their families watching closely for what Congress does next.