To amend section 3104 of title 38, United States Code, to permit retired members of the Armed Forces who have a service-connected disability to receive compensation from the Department of Veterans Affairs, without reduction, concurrently with retired pay reduced on the basis of the degree of the disability rating of such retired member.

Permits retired members of the armed forces to be paid retirement pay concurrently with compensation for any service-connected disability if the person's entitlement to such retirement pay is based solely on: (1) age; (2) length of service; or (3) both.

Reduces the amount of retirement pay, in the case of individuals receiving both types of pay, by a specified percentage of the disability compensation which decreases as the disability rating increases.

Prohibits any reduction in the retirement pay of a disabled person when the disability rating is total.

Expresses the sense of the Congress that, once the Federal budget deficit has been reduced, the Congress should reexamine and eliminate any offset of retired pay by a veteran's disability compensation.