"On December 22, 2010, President Obama signed P.L. 111-321 into law. It calls for the repeal of the existing law (Title 10, United States Code, §654) barring open homosexuality in the military by prescribing a series of steps that must take place before repeal occurs. One step was fulfilled on July 22, 2011, when the President signed the certification of the process ending the Don't Ask, Don't Tell policy, which will be repealed on September 20, 2011. However, in repealing the law and the so-called 'Don't Ask, Don't Tell' policy, a number of issues have been raised, but were not addressed by P.L. 111-321. This report considers issues that Congress may wish to consider as the repeal process proceeds. […] Based on military fitness policies, individuals who have a history of mental disorders that, in the opinion of the medical examiner, would interfere with or prevent satisfactory performance of military duties are not allowed to serve. Among the disorders cited are 'sexual and gender identity disorders.' (These disorders are listed in the International Classification of Diseases, 9th Revision, Clinical Modification or ICD-9-CM, 302.) At one time, homosexuality was listed as a psychiatric disorder, but this was removed from the Diagnostic and Statistical Manual (DSM) in 1973. Some have argued that other 'gender disorders' should also be removed. Along these lines, advocates believe it is unfair for the military to continue to discriminate against these individuals. Others, however, believe that until the DSM and ICD-9-CM are changed, such individuals should continue to be barred from serving."
CRS Report for Congress, R42003