US President Donald Trump says transgender people cannot serve in "any capacity" in the military.
The Obama administration decided last year to allow transgender people to serve openly in the military.
But in June, Defence Secretary James Mattis agreed to a six-month delay in the recruitment of transgender people.
"Our military must be focused on decisive and overwhelming victory and cannot be burdened with the tremendous medical costs and disruption that transgender in the military would entail.".
Rand also predicted that the inclusion of transgender people in the military would cause a 0.13% increase in healthcare spending (approximately $8.4m).
Image copyright Twitter @xychelsea Image caption Chelsea Manning, a transgender former US soldier, tweeted her reaction to the news.
Republican opponents of transgender people serving in the military include Vicky Hartzler, a congresswoman from Missouri, who wants transgender service members honourably discharged. »