Defense Secretary Backs Bill to End ‘Wounded Warrior Tax’ as Military Spouses Push for Business Support on Capitol Hill

At a recent Senate Armed Services Committee hearing, Defense Secretary Pete Hegseth made it clear he supports the Richard Star Act, legislation designed to end the so-called “wounded warrior tax.” This tax forces combat-injured veterans who retire early—before 20 years of service—to have their military retirement pay reduced dollar-for-dollar by the amount of disability compensation they receive from the Department of Veterans Affairs.

Senator Richard Blumenthal, the top Democrat on the Senate Veterans’ Affairs Committee, pressed Hegseth on the issue, highlighting that veterans injured in conflicts such as the ongoing Iran engagement are penalized if they cannot complete 20 years of service. Hegseth responded, “As I have said in the past to other organizations, we support the Richard Star Act.”

Currently, only veterans with disability ratings above 50% and 20 or more years of service can receive full retirement pay plus VA disability compensation. This leaves an estimated 54,000 combat-injured veterans stuck with reduced benefits. The bill honors Major Richard Star, an Army combat engineer who died from burn pit-related cancer and fought tirelessly for injured veterans. Despite broad bipartisan support—79 Senate co-sponsors and 323 in the House—the bill has been blocked twice by Senate Republican leaders citing cost concerns.

In a related development, more than 50 military spouses are mobilizing on May 7 for a day of advocacy on Capitol Hill. They aim to push the Military Spouse Small Business Recognition Act, which would formally recognize small businesses run by military spouses and improve their access to Small Business Administration capital and resources.

Military spouses face unique challenges: frequent relocations, career interruptions, and limited funding opportunities. The Military Spouse Chamber of Commerce highlights that this group suffers the highest unemployment rate in the country, about 22%, and access to funding remains a major barrier to entrepreneurship.

This dual push—from injured veterans fighting for fair compensation to military spouses seeking economic empowerment—underscores the ongoing struggle for recognition and support within the military community. As lawmakers debate these issues, the stakes remain high for those who sacrifice so much in service to the nation.