Guard and Reserve enlistments are responding to increased recruiting efforts. The increased readiness of Guard and Reserve units, coupled with the high cost of manpower in the active forces, underscore the urgency of increased reliance on the Guard and Reserves in our national defense system. In fiscal year 1973, it will cost $9,100 to pay, clothe, and feed the active force military member-which is five times the cost of maintaining his Guard or Reserve counterpart. The implication is clear. With greater reliance on the Guard and Reserve, we can provide more defense for the dollars invested. In short, the Guard and Reserve is a security bargain, and we intend to fully exploit its potential. MILITARY RETIREMENT An essential ingredient of effective force management is a retirement system that encourages the retention of the desired size and quality of force, and provides adequate benefits for retiring members at manageable costs. Currently, the interaction between grade limitations, advancement opportunities, and the military retirement system is troublesome. Unlike most private and public plans, the military system provides no retirement equity until the member has completed 20 years of service. As a result, the military services tends to retain more people than they need to the 20-year point to establish their retirement rights. Conversely, those who retire with 20 years service can do so with incomes that typically exceed those of their counterparts remaining in service. This is because the combination of military retired pay and civilian job income in a second career almost always exceeds regular military compensation of the active duty member. Thus, on the one hand the system operates to over-supply the military services, and on the other hand as a retention disincentive for long-service career members whose retired colleagues have higher incomes. It was because of these and other considerations that the President convened an Interagency Committee a year ago to study the military retirement system and to make appropriate recommendations for changes in it. This committee, of which I am chairman, has completed its study of nondisability retirement and survivor benefits for the active and Reserve forces, and will complete the remainder of its study soon. In the meantime, we are reviewing these matters with the military departments preliminary to presenting legislative recommendations that reflect the best judgment of the Department of Defense and the executive branch, both as to the military retirement plan and its interaction with policies governing tenure and career progression. MILITARY GRADE MIX During the recent period of rapid and substantial force reduction, the proportion of senior officers in the Armed Forces increased just as it decreased during the earlier periods of rapid buildup. In fiscal year 1973, however, as we approach our baseline force, the picture changes. Excluding physicians, dentists, and nurses, the distribution of senior officers is very similar to that of 1964 when the force was about the same size, with one exception. That exception is the grade of colonel in which there is an increase of about 800, due mainly to the grade relief enacted by the Congress in 1966 to provide Air Force officers promotion opportunities comparable to those of officers in the other services. The following table shows the proportion of senior officers in the fiscal year 1973 and fiscal year 1964 forces: TOTAL DOD OFFICER FORCE DISTRIBUTION, INCLUDING AND EXCLUDING PHYSICIANS, DENTISTS, AND NURSES Mr. KELLEY. As of June 30, 1973, there will be 10 more flag or general officers than there were in fiscal year 1964. In addition to the comparison of military grade mix in fiscal year 1973 and fiscal year 1964, it is interesting to compare trends in military grade mix with corresponding trends in DOD and Government-wide civilian jobs. In this connection, it should be noted that DOD civilian "grade creep" has been lower historically than the civilian Governmentwide level. Mr. KELLEY. It is difficult to make valid comparisons between the proportional growth in general and flag officer positions on the one hand, and civilian supergrade positions on the other. The latter have existed for only 2 decades, and given that late start it is to be expected that they would increase at a faster rate. Also, there is significant history, particularly in the research and development community, which accounts for much of the recent growth in supergrade positions. Notwithstanding these factors, the proportional growth of general and flag officer positions compares favorably with the growth of supergrade positions in recent years. Certainly, there is no basis for concluding from this comparison that there is an excessive number of military members in general officer positions. THE IMPORTANCE OF HAVING A STABLE FORCE The root cause of many of our manpower problems is turbulencethe excessive movement of people into, within, and out of the services. In the rapid buildup and drawdown of forces related to Vietnam, and its typical short tour and early-out requirements, our Armed Forces have experienced the highest degree of turbulence in its history. The impact was particularly severe on the Marine Corps, which had more men in uniform during the Vietnam era than in World War II; and on the Army, whose numbers of soldiers entering and leaving each year exceeded the total size of the Army. Of course, the cost impact has been substantial. The military member has made a permanent change of station move on the average of one a year, and the annual cost of travel alone in such moves exceeds $1 billion. In fiscal year 1973 the cost of military training, including pay and support of trainors as well as trainees, will be $6.6 billion-an average of $2,750 for every person in the service. While these costs are great, of even greater significance is the effect of turbulence upon the organization's ability to sustain morale and credibility with the troops. A military unit within a turbulent organization is apt to be victimized by undermanning, or a failure to fill job slots when they are vacated. A unit with a substantial number of vacant slots encounters great difficulty in keeping its members busy in a mission-oriented way and in maintaining unit readiness. These are the typical problems with which squad leaders, senior petty officers, and unit commanders have had to cope. This is the stuff of which drug adventures and racial turbulence is made-stalemates caused by undermanned units, continuing rotation and new faces with many people being deprived of the opportunity to remain anywhere long enough to develop unit identification, job proficiency, and a sense of personal security. I regard the regaining of force stability to be one of the most important needs of the Armed Forces in the manpawer area. It is our responsibility to size the organization and to adjust its personnel policies and plans so that military members will experience a much greater degree of stability-with the resulting benefits of higher unit readiness, better morale, and lower costs. MILITARY VERSUS CIVILIAN Civilians account for about 34 percent of our total manpower requirements in the fiscal year 1973 budget, and increase from about 30 percent for the 1964-71 period, as shown in the following table: 1964 1968 1969 1970 1971 Civilians as a percent of DOD manpower as of June 10 30.3 28.8 29.6 29.7 31. 1 33.9 1972 1973 33.7 Mr. KELLEY. Since the reduction to baseline levels will be largely completed by the end of fiscal year 1973, we plan to press hard for better answers in this area, if for no other reason than the fact that the civilian employee usually costs less than the military member, provided they are both producing the same result. I don't know at this point how much further we should go in increasing the civilian portion of the total Defense work force. Some jobs that could be performed by civilians must be reserved for military personnel to meet their rotation needs and to provide an opportunity to be reunited with their families between unaccompanied tours. Other jobs must be reserved for military members because their background is essential to effective unit performance. We would welcome the opportunity for further discussions in this area of military-civilian tradeoffs after we have studied the matter further in a more stable force environment. UTILIZATION OF WOMEN Still another issue is the extent to which women can be utilized in meeting the manpower needs of the All-Volunteer Force. Although the major role of women in service in the past has been primarily in medical, clerical, and personnel areas, there are many other occupations in which women are now serving effectively. Accordingly, studies are underway to determine the feasibility of increasing the number of women on active duty and of broadening their career opportunities. SOME QUALITY CONSIDERATIONS We have a twofold objective in selecting people for military service and in establishing the quality mix of the forces. It is: 1. To achieve a balance between bright people and mentally taxing jobs, and between those in the lower mental categories and the less difficult jobs. 2. To select the whole person-taking into consideration such factors as the individual's school record, personal attitude and motivation, and his record as a citizen. Experience shows that some who test poorly perform well, and vice versa. Experience also shows that test performance does not necessarily correlate with one's record as a citizen, nor with one's capacity to cause disciplinary and other behavior problems in the services. Considerable emphasis has been placed, and more will be, upon assigning the responsibility for people selection to superior military members who understand what it takes to be a good soldier, sailor, airman, or marine-and are able to recognize those qualities in others. One of the great hazards of the draft environment is that it nurtures the attitude "we take what we get." In the environment of the All-Volunteer Force, we will select persons who have the qualities needed, and we will consider the selection responsibility to be among the most important in the field of personnel management. SPECIAL PAYS Over the years, many forms of special pay have come into being where regular military pay alone has been insufficient to meet special manning problems. These special forms include such items as pay for proficiency, sea duty, submarine duty, exposure to hostile fire, flight duty, and enlistment and retention incentives-and totally they cost more than $2 billion a year. With the prospect of eliminating reliance on the draft, it is essential to reexamine these special pays in light of experiences with them and special manning problems. On January 25, 1972, at the direction of the President, I forwarded to you the report of the 1971 Quadrennial Review of Military Compensation which examined the following critical special pays and recommended appropriate adjustments: Special compensation for physicians, dentists, and veterinarians, and continuation pay for physicians; Flight pay (crewmember) and submarine duty pay; Enlisted attraction and retention incentive pays. The Quadrennial Review study recommends the restructuring of enlisted attraction and retention incentive pays, and also flight and submarine duty pay. The transitional costs involved in these changes are modest, and it is believed that the payoff will be substantial in terms of increasing the accession and retention rates and lowering training and other costs. Legislative proposals will be considered after determining the fiscal year 1973 budgetary impact and the relative priority of all Defense programs necessary to bring about zero draft calls. These matters will require further coordination within the Department of Defense and the executive branch. Mr. Chairman, I appreciate the opportunity to present our views on the size and composition of the military force, cost trends, and other characteristics of defense manpower, and some of the key issues related to the most effective utilization of people in our national security system. We need your understanding and support, and hope that we may pursue these matters in greater depth with members of your committee and staff. With me are senior officers representing each of the services: Lieutenant General DePuy of the Army; Rear Admiral Finneran of the Navy; Major General Wheeler of the Marine Corps and Major General Berg of the Air Force. We work closely with one another on the affairs of defense manpower, and I recommended that you let each officer provide the manpower highlights for his service. I would be happy to respond to your questions now or after you have heard from my military colleagues. Thank you very much. COMMITTEE PROCEDURE The CHAIRMAN. Thank you, Mr. Secretary. Members of the committee, I propose, if it is agreeable to the committee, that we have some questions now for the Secretary before we |