President Donald Trump announced a new ban on transgender military service.
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"The Secretary of Defense, and the Secretary of Homeland Security, with respect to the U.S. Coast Guard, may exercise their authority to implement any appropriate policies concerning military service by transgender individuals", it added.
"The Trump-Pence administration's continued insistence on targeting our military families for discrimination is appalling, reckless, and unpatriotic", said Ashley Broadway-Mack, president of the American Military Partner Association and spouse of an active duty Army officer.
In February, the Pentagon confirmed to CNN that the first transgender person had signed a contract to join the United States military following a federal judge's ruling that said the military would have to accept transgender people.
In August, Trump sent Defense Secretary Jim Mattis a memo ordering him to propose changes to the Obama-era policy that allows transgender troops to serve openly and receive medical treatment, including sexual reassignment surgery.
The White House announced the policy even as the Justice Department submitted it to a federal court, which had been hearing a lawsuit challenging the original ban.
The ban on transgender troops was lifted in June 2016 when then-Defense Secretary Ash Carter permitted those already in uniform to begin serving openly and ordered the military branches to begin preparing to accept new recruits by July 1, 2017.
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The decision revokes a full ban that Trump issued last summer but disqualifies USA troops who have had gender reassignment surgery, as recommended by Defense Secretary Jim Mattis.
More recently, a federal district court judge in Maryland ruled that the US must continue to fund sex-reassignment surgeries for transgender service members in the military, citing that they have "already suffered harmful consequences", after President Trump called for the transgender ban in the military.
"The new policy developed through an extensive study by senior uniformed and civilian leaders, including combat veterans", she said.
The decision comes after Trump's initial pledge was severely criticized by LGBTQ rights groups and top military officials, including most members of the Joint Chiefs of Staff.
"The Trump-Pence Administration continues to double down on its cruel and unconstitutional ban on transgender troops", said HRC National Press Secretary Sarah McBride.
The Trump Administration can't deny funding for certain medical care for transgender service members, District Judge Marvin Garbis said.
Two transgender individuals are already under contract to serve in the US military since that court ruling.