The CHAIRMAN. I hope that is right, I am encouraged by what you say, Mr. Secretary. I think that is a good answer.

Senator Thurmond.

Senator THURMOND. Nothing else.

The CHAIRMAN. If you do not have anything more, let us check on the situation when they think they are going to vote. By the way, without objection, I want to put in the record here the points I raised on the subject of retired pay. I will not take anymore time now. Put that in the record.

(The information follows:)

Retired pay costs have increased from $1.2 billion in fiscal year 1964 to $4.9 billion for fiscal year 1973, which does include about $270 million for legislation yet to be submitted. Retirement costs are estimated to reach $16 billion per year by the year 2000.

There is presently a net addition to the retired role of about 50,000 men per year with an average age of middle or low forties and most of whom are in their prime of life in terms of experience. This situation results basically from several factors:

1. We have had a large active force on duty since World War II but superimposed on this is rapid promotion and early retirement, far beyond anything contemplated when the laws authorizing the present system were established after World War II. Admittedly, the Congress has not attempted to reform this system to any degree.

2. There has been a lack of management in the Department of Defense on trying to control this matter. We have now reached the point where lack of management threatens to make this entire retirement matter unmanageable just from the cost standpoint.

There will always be strong opposition to any reform of the system. Some means must be found, however, to utilize our military men for a longer period of active service and bring the tight cost within some semblance of control.

The CHAIRMAN. We thank you very much and we have kept you away from your office all day. If you wish to retire now you may. We will move to the next witness.

Mr. KELLEY. I would rather remain. Thank you, Mr. Chairman. The CHAIRMAN. All right, if you will let the chief witness sit over here.

General DePuy, we do not know how long we will proceed with you but at least, we will get started. For the record, this is Lt. Gen. William E. DePuy, Assistant Vice Chief of Staff, Department of Army, and we are glad to have you here, sir.

General DEPUY. Mr. Chairman, Senator Thurmond, we are very hopeful that we can explain the Army manpower program and force structure fairly thoroughly to the committee.

We have briefed the staff of the committee in greater depth, of course, than I will have time to do here. I have tried to pick out those aspects of it which are highlights in deference to your knowledge, but we are prepared to go behind these charts in greater depth if you wish.

I want to talk a little bit about how we get our force requirements. I want to talk about the things we think are on your mind, which is the support-to-combat ratio, the so-called teeth to tail. I want to talk about the problems of 1972, which feed into 1973, and I would also like to break Europe out into its various parts so that discussions about Europe can take place in the context of what we have got over there. The CHAIRMAN. The perspective of the Army over the last 7 years is portrayed on this chart. You may recall this chart from 2 years

ago.

General DEPUY. Back in the Korean War and again at the Berlin crisis we mobilized some Reserves but, as you know, we did not do so in Vietnam, and so as a consequence the Army grew from 1965 until the peak of the war in 1968 and 1969 from less than a million to over a million and a half with only a token mobilization. This meant, of course, that we promoted many soldiers to sergeant and many junior sergeants to senior sergeants, many junior officers to middle grade officers, and so on. As we started back down we plotted a path which would permit us to rid ourselves of some of the lower quality but at the same time, would not force us to take actions which were not cost effective and which would not be equitable to our people. We managed to do that reasonably well until this year, and I will come back and indicate some of the problems that have occurred this year.

Fundamentally, we came down in this year as far as we would like to have come down in 2 years, and this is the source of many of our current problems.

We have had many discussions of personnel costs as a percentage of the budget. Here is our view of it including subsistence and it has peaked and started down a little bit. It is 60.2 percent of our budget. Now, of course, this is a little bit of a phony, Mr. Chairman, because you see it has a lot to do with how big your budget is insofar as the total budget varies. For example, if we had a fixed amount of money that we put on our investment accounts, this figure would never change no matter what happened to the pay, so to that extent it is not meaningful.

We have had a number of questions today which asked "What would happen if we took a division out of Europe?" Those are the kinds of questions which frankly, Mr. Chairman, we would prefer not to address. I say that because we in the Army are given guidance by the Secretary of Defense after he has checked with the NSC, the President, the JCS, and we have been told to provide certain division forces for certain purposes. We in the Army have been told to meet a requirement in Europe of [deleted].

We are also told if a war started in Asia that we should be prepared to send [deleted].

We have a 13-division force. So if, for example, we sent [deleted] to Asia and if we sent to Europe just those divisions for which we have prepositioned equipment, and that would be [deleted].

We are [deleted].

[Deleted] which we have designated, to which we have issued first line equipment and to which we are giving great attention on readiness. This is faster than we have done it at any time in the history of the country but nonetheless, it is our objective. It is that kind of stategy that led us to 13 divisions and that is the staring point for our structure.

You asked a moment ago of Secretary Kelley the extent to which we rely upon the Reserves. This is a picture of the extent to which we rely on the Reserves for Europe in the first [deleted] days of a war. It shows over here what we would have to start with, and that would be after the deployment of the first division from Fort Riley. The red indicates Reserve component organized units. The numbers represent total Reserve component people.

This little support increment, Mr. Chairman, [deleted] people, and yet [deleted] Reserves would be sent to Europe. The rest are individual replacements. They are the individual ready Reserves sent to fill up active units and to provide for combat casualty replacements.

General DEPUY. Back in the Korean War and again at the Berlin crisis we mobilized some Reserves but, as you know, we did not do so in Vietnam, and so as a consequence the Army grew from 1965 until the peak of the war in 1968 and 1969 from less than a million to over a million and a half with only a token mobilization. This meant, of course, that we promoted many soldiers to sergeant and many junior sergeants to senior sergeants, many junior officers to middle grade officers, and so on. As we started back down we plotted a path which would permit us to rid ourselves of some of the lower quality but at the same time, would not force us to take actions which were not cost effective and which would not be equitable to our people. We managed to do that reasonably well until this year, and I will come back and indicate some of the problems that have occurred this year.

Fundamentally, we came down in this year as far as we would like to have come down in 2 years, and this is the source of many of our current problems.

We have had many discussions of personnel costs as a percentage of the budget. Here is our view of it including subsistence and it has peaked and started down a little bit. It is 60.2 percent of our budget. Now, of course, this is a little bit of a phony, Mr. Chairman, because you see it has a lot to do with how big your budget is insofar as the total budget varies. For example, if we had a fixed amount of money that we put on our investment accounts, this figure would never change no matter what happened to the pay, so to that extent it is not meaningful.

We have had a number of questions today which asked "What would happen if we took a division out of Europe?" Those are the kinds of questions which frankly, Mr. Chairman, we would prefer not to address. I say that because we in the Army are given guidance by the Secretary of Defense after he has checked with the NSC, the President, the JCS, and we have been told to provide certain division forces for certain purposes. We in the Army have been told to meet a requirement in Europe of [deleted].

We are also told if a war started in Asia that we should be prepared to send [deleted].

We have a 13-division force. So if, for example, we sent [deleted] to Asia and if we sent to Europe just those divisions for which we have prepositioned equipment, and that would be [deleted].

We are [deleted].

[Deleted] which we have designated, to which we have issued first line equipment and to which we are giving great attention on readiness. This is faster than we have done it at any time in the history of the country but nonetheless, it is our objective. It is that kind of stategy that led us to 13 divisions and that is the staring point for our structure. You asked a moment ago of Secretary Kelley the extent to which we rely upon the Reserves. This is a picture of the extent to which we rely on the Reserves for Europe in the first [deleted] days of a war. It shows over here what we would have to start with, and that would be after the deployment of the first division from Fort Riley. The red indicates Reserve component organized units. The numbers represent total Reserve component people.

This little support increment, Mr. Chairman, [deleted] people, and yet [deleted] Reserves would be sent to Europe. The rest are individual replacements. They are the individual ready Reserves sent to fill up active units and to provide for combat casualty replacements.