News

(WASHINGTON) — Transgender U.S. service members will be separated from the military unless they receive an exemption, according to a new Pentagon policy disclosed in a court filing on Wednesday.

According to the memo, the Pentagon must create a procedure to identify troops who are transgender by March 26 and orders that the separation of individuals diagnosed with gender dysphoria must be completed by June 25.

Those to be separated from the military will include service members receiving some form of treatment or hormones for that diagnosis of gender dysphoria or who have gone through a gender-affirming surgery.

The new policy was included as an exhibit in the federal case of Talbott v. Trump, a federal lawsuit challenging President Donald Trump’s Jan. 27 executive order that rolled back the previous policy allowing transgender service members to serve in the military.

“Military service by Service members and applicants for military service who have a current diagnosis or history of, or exhibit symptoms consistent with, gender dysphoria is incompatible with military service,” the memo said.

“Service by these individuals is not in the best interests of the Military Services and is not clearly consistent with the interests of national security,” said the memo.

“Individuals who have a current diagnosis or history of, or exhibit symptoms consistent with, gender dysphoria are no longer eligible for military service,” it added.

The service members who will be separated will receive honorable discharges unless their record indicates they should receive a lower-level discharge. Receiving an honorable discharge means they would be able to receive benefits from the Department of Veterans Affairs.

“The Department only recognizes two sexes: male and female. An individual’s sex is immutable, unchanging during a person’s life. All Service members will only serve in accordance with their sex,” according to the memo.

The new policy will allow certain exemptions from separation or allow enlistment on a case-by-case basis separation if they can provide that “there is a compelling Government interest in retaining the Service member that directly supports warfighting capabilities.”

Current service members can also apply for an exemption if they can prove that they have been stable in their sex for three months “without clinically significant distress or impairment in social, occupational, or other important areas of functioning,” and that they never attempted to transition to another sex; and will adhere to all standards for the service member’s sex.

On Feb. 7, Defense Secretary Pete Hegseth issued a memo that lifted the Pentagon’s previous policy on transgender service and said the U.S. military would no longer allow transgender individuals to join and would stop performing or facilitating procedures associated with gender dysphoria. He also set a timeline for the Pentagon to develop an implementation plan for the new policy.

There are currently 4,240 active-duty, Guard and Reserve service members who have been diagnosed with gender dysphoria, according to a defense official.

Since 2014, the total number of diagnoses for gender dysphoria was 5,773 with 1,000 of those having gone through gender-affirming surgery. The total costs for treatments, hormones and surgeries during that time frame was $52 million, said the official.

There are about 2.1 million service members in the U.S. military — and about 1.3 million of them are on active duty.

Copyright © 2025, ABC Audio. All rights reserved.

(WASHINGTON) — One day after the Department of Veterans Affairs celebrated an estimated $2 billion in savings on canceled contracts, the agency began reversing some of the cancellations that may have affected veterans’ medical care and other benefits, according to multiple sources familiar with the contracts and agency records reviewed by ABC News.

“We were taking in millions of dollars in contracts to create things like PowerPoint slides and meeting minutes,” VA Secretary Doug Collins said on Tuesday. “Millions of dollars in contracts for ‘coaching and training.'”

“Don’t feed the line of what D.C. is wanting to sell you,” he added. “We are putting money back to veterans’ health, back to veterans’ benefits. And don’t let nameless sources, even senators and House members, who want to scare you, and the media, who want to perpetuate the line. We’re taking care of veterans.”

But the hundreds of contracts set for cancellation included some for legally required technical inspections of medical equipment that produce radiation at VA facilities, including CT scanners, MRI machines and dental X-ray units.

Without annual inspections, some of which are conducted by contractors in part to save the agency money, VA staffers are not permitted to use the equipment.

“We’re a really good deal for them,” said one contractor with multiple agency contracts, including several that were initially canceled — and then reversed by Wednesday afternoon. “They can’t afford to have that done in-house.”

Canceling the contracts “100% will impact care,” a VA official told ABC News. “If [the machines] get serviced or a part is replaced, they need to be inspected as well.”

Asked for comment Tuesday, a VA spokesperson told ABC News, “We’re reviewing VA’s various contracts, and we will be canceling many focusing on non-mission critical things like PowerPoint slides, executive support and coaching. Our review is ongoing and not final.”

“We will not be eliminating any benefits or services to veterans or VA beneficiaries, and there will be no negative impact to VA healthcare, benefits or beneficiaries,” the spokesperson added. “We are always going to take care of veterans at VA. Period.”

Some of the contracts marked for termination on Monday included contracts to provide employee and workplace benefits services to tens of thousands of VA employees and their families. Others included work overseeing hazardous waste disposal, conducting safety inspections at VA medical facilities, supporting cancer programs and burial services, according to agency records review by ABC News.

Some of the contracts marked for termination on Monday included contracts to provide employee and workplace benefits services to tens of thousands of VA employees and their families. Others included work overseeing hazardous waste disposal and conducting safety inspections at VA medical facilities.

Many of these contracts are labeled as some variations of consulting, a sweeping category of federal contracts that the Department of Government Efficiency’s team has aggressively gone after as part of its efforts to cut wasteful government spending.

“Everyone can agree that there is waste, likely fat, and there may very well be some fraud,” Arthur Mabbett, a disabled veteran and CEO of Mabbett & Associates, a government contractor with dozens of contracts with the VA and other agencies, told ABC News.

“Doing it in a businesslike fashion, rather than pure chaos, which is what they’re doing right now, would be a better approach,” said Mabbett, whose company has not had its stop-work orders rescinded as of Wednesday evening.

Some of that work includes working with VA facilities to make sure expansion and renovation projects comply with federal environmental law.

Sen. Richard Blumenthal, D-Conn., on Tuesday slammed Collins’ previous move to cancel the contracts, saying many of those contracts provide “critical and direct services” to veterans.

“To say abruptly cancelling these services won’t impact veterans’ care and benefits is another unrealistic promise from Collins,” Blumenthal wrote in a statement. “Make no mistake — this is just another reckless cost-cutting decision that will harm veterans and taxpayers for years to come.”

Agency leaders directed employees to begin terminating hundreds of contracts on Monday, with some stop-work orders issued that evening.

Already, some of those stop-work orders have been rescinded — one of several DOGE-led efforts across the federal government that have been slowed or partially reversed by various agency leaders.

“I like what they’re doing, I just think they made a mistake, and they need to fix it,” one contractor told ABC News about the overall DOGE efforts. “If it goes quickly, I’ll be happy. And if it takes three to four months, I won’t be.”

The VA has already gone through two rounds of layoffs: The first affected 1,000 workers, and the second, announced this week, affected 1,400 “non-mission critical positions,” according to the agency’s statement.

Some of those terminated employees were asked to return to work days later, workers told ABC News.

Other layoffs may be on the horizon. On Wednesday, the Trump administration directed agencies to begin preparing for “large-scale” layoffs and reorganizations and to present plans for doing so to the Office of Management and Budget by March 13, according to a memo obtained by ABC News.

-ABC News’ Soorin Kim and Nathan Luna contributed to this report.

Copyright © 2025, ABC Audio. All rights reserved.

(WASHINGTON) — House Republicans signaled they’re going full steam ahead on significant changes to Medicaid, despite pressure from Democrats and even some moderates in their party.

The suggested overhauls to the program, which provides health care for lower-income Americans and those with disabilities, are part of an effort to slash federal spending and hit the House GOP’s goal of cutting $2 trillion over a decade from the federal budget.

“I support any plan that helps Medicaid be sustainable. And the current trajectory of Medicaid is not,” said Florida Republican Rep. Byron Donalds, who recently declared he’s running for governor of Florida — a state with millions of Medicaid recipients.

“Medicaid is supposed to be for people who are disabled, for children, for single parents with multiple kids. That’s what Medicaid is for. And if we continue down this line where it just becomes a bigger and bigger portfolio of beneficiaries, the federal government is not going to be able to afford the match,” Donalds added.

In a letter to Speaker Mike Johnson, moderate Republican members of the Congressional Hispanic Conference warned “slashing Medicaid would have serious consequences, particularly in rural and predominantly Hispanic communities.”

Asked what he would say to Republican colleagues who are worried cuts to Medicaid will have a serious impact on lower income Americans, Donalds replied, “I think some of that is, quite frankly, fear-based. We know the Democrats are already running ads about Medicaid and about how what we’re trying to do is damaging to people and it’s just simply not true.”

Some GOP members have floated adding new work requirements to the program and capping the amount of money states receive to run their Medicaid programs — a pitch that could drastically reduce the number of people on Medicaid and limit the funding available for beneficiaries.

“I don’t consider that a cut,” Rep. Ralph Norman, R-S.C., said about work requirements. “I don’t consider block-granting to the states a cut. The Democrats are using that but it’s just not right.”

The exact plan is still unclear. Approving the House budget blueprint Tuesday night was just the first step in a months-long budgeting process that could stretch into the summer.

“We’re very early in this process,” New York Rep. Nicole Malliotakis, a moderate who represents a Staten Island district with a significant number of Medicaid recipients, said.

“Maybe you should wait until we actually do the work and highlight what we’re going to do,” she said.

Republicans also believe they can achieve a significant amount of their spending cuts by targeting fraud in Medicaid and Medicare. But eliminating all fraud and waste would likely only chip away at Republicans’ goal.

Asked about that approach, Malliotakis said, “There’s about $50 billion a year in fraud, just within the Medicaid program.”

But whether Republicans can get to the kinds of numbers they’re talking about by just eliminating fraud, Malliotakis said, “Well, yes. Within the health care. You’re going to look at that, you’re going to look at the loopholes the states have put in place.

Meanwhile, Democrats are pouncing.

An internal Democratic Congressional Campaign Committee memo first obtained by ABC News shows Democrats aim to make Medicaid cuts “politically perilous for House Republicans” in the November 2026 midterm elections.

“Rather than delivering on their campaign promises to lower the high cost of living, [Republicans] are poised to pass an extreme budget scheme that would decimate affordable health care and take food off the tables of millions of American families,” the memo reads.

Copyright © 2025, ABC Audio. All rights reserved.