One week after House Democrats said they did not have the money to pay for long-promised increases in pay for disabled retirees, they unveiled a major military and federal civilian pay package that does even more. The source of money for the new bill, HR 2990, is an obscure fund to pay for research into locating deepwater oil and natural gas resources. "Congress has been working to find a way to permanently eliminate the disabled veterans' tax for many years, but fixing this entitlement program is an immensely difficult task," said Rep. Ike Skelton, D-Mo., chairman of the House Armed Services Committee and chief sponsor of the bill. Skelton said the legislation does not go as far as he had hoped, but it "moves us closer to fulfilling the President's pledge to give disabled veterans full access to the benefits they deserve." It was not immediately clear how much money lawmakers got by tapping into the oil and gas development fund. The money source was not available last week when the House Armed Services Committee was approving its version of the 2010 defense authorization bill, but it is available if lawmakers are writing a separate bill. Congressional sources, speaking on the condition of anonymity, said they expect the new legislation will be merged with the defense policy bill into a single measure at some point. The bill is called Disabled Military Retiree Relief Act, a name derived from one of its key elements aimed at people who received military disability retirement with less than 20 years of service. These "Chapter 61" retirees - a reference to the section of the U.S. Code covering the military disability retirement plan - would be allowed to receive their full military retired pay plus veterans' disability compensation, a major change from current law in which retirement pay is reduced dollar-for-dollar by any amount received in disability compensation. President Barack Obama had pledged during the presidential campaign this year to allow all Chapter 61 retirees to be able to concurrently receive both payments, but the bill would not do that right away. The offset would be phased out over several years, beginning with full payments of retired and disability pay on Jan. 1, 2010 for those whose disabilities are rated at 100 percent, including those whose 100 percent disability is based upon a determination that their medical conditions make them unemployable. Full concurrent receipt for all Chapter 61 retirees would take effect Jan. 1, 2014. The bill contains other provisions as well. For the military, it includes a one-year extension of many military bonuses and special and incentive pays that are about to expire, and provisions on re-computing retirement pay for some reservists. For federal workers, it includes a credit for unused sick leave, a new process for computing retired pay based upon part-time service and a provision involving the credit given to people who transferred from working for the District of Columbia government to working for the federal government. Skelton described this as "important changes" to the federal retirement system.