From The New Civil Rights Movement: http://thenewcivilrightsmovement.com/1-after-dadt-transgender-life-in-the-united-states-military/politics/2013/08/05/72476
August 5, 2013
It has been nearly two years since the end of “Don’t Ask, Don’t Tell” (DADT). Most people, including many within the LGBT community (including some very prominent LGBT leaders), were or still are unaware that the end of DADT did not end the exclusion of transgender people from military service. There is no law preventing transgender individuals from serving. However, being transgender is still grounds for “rejection for military service.”
A Department of Defense instruction document, DoDI 6130.03, which is as clinical as its title suggests, states that the following exclude one from military service:
14 Female Genetalia f: History of major abnormalities or defects of the genitalia including but not limited to change of sex (P64.5) (CPT 55970, 55980), hermaphroditism, pseudohermaphroditism, or pure gonadal dysgenesis (752.7).
15 Male Genetalia f: History of major abnormalities or defects of the genitalia including but not limited to change of sex (P64.5) (CPT 55970, 55980), hermaphroditism, pseudohermaphroditism, or pure gonadal dysgenesis (752.7).
29.r: Current or history of psychosexual conditions (302) including but not limited to transexualism (sic), exhibitionism, transvestitism, voyeurism, and other paraphilias.
The exclusion of transgender people from the military is three-fold. First is the basis of needing intact gonads on the basis that the service does not need the added burden of maintaining an individual’s endocrine system. The second is the psychiatric rationale that Gender Identity Disorder (GID), as defined by the DSM-IV, is a mental disorder. The last, unstated assumption is that having openly transgender people would be prejudicial to good order and discipline.
While each of these rationales is demonstrably false, overcoming them is extremely difficult due to public stigmatization of the transgender community.
Each branch of the service has their own guidelines for separating transgender service members administratively. Waivers for being transgender are not granted. This last part is somewhat ironic, because waivers for pedophilia, voyeurism, and bestiality are.