hurriedly, admittedly, twice, and by your own assertion so far as you know, there are only 15 words involved, but I will not pursue that further and I am not asking that it be released but we can stand on the figures, can we?

Mr. KELLEY. Yes, sir.

Senator BYRD. Regardless of subsequent testimony.

Mr. KELLEY. We can stand on the testimony.

The CHAIRMAN. Just yield to me 1 minute there. The question of whether or not it is classified is for some other department to pass on. Mr. Secretary, if you send us one that is not classified, we will make a judgment whether to release it or not. That is the committee's business. We are driven to the fact that we had to ask you gentlemen to come in here ahead of Mr. Laird, and I know you are in deference to him. But we will release it if it comes over. Thank you.

RATE OF REDUCTION

Senator BYRD. In your statement you say "I want to present not only the reasons why we are recommending a further reduction to the level of the 2.4 million."

The chairman touched on this. I want to pursue it a little bit. Technically, you are right in recommending a further reduction, but it seems to me it is a miniscule reduction, practically no reduction; 33,000 out of 2,400,000, or something like that. A 1-percent reduction-I do not even call that a reduction.

Mr. KELLEY. I think your criticism is well founded. Perhaps my choice of words might have been better. There has been a continuing downglide of manpower strength in the last 5 years, particularly in the last 3.

Senator BYRD. That is because you eliminate, or will have by next May eliminated, 500,000 men from Vietnam, and I think the administration has done a good job on that. I support their position. I think they have made great progress and I do not agree with these people who criticize the administration every day on what is happening in Vietnam. I think the administration has done a good job there; 500,000 people have been brought back since President Nixon took office. But I do not regard this as any reduction in our military forces if you talk about 33,000 men out of 2,400.000.

RISE IN MANPOWER COSTS

On page 2, "Despite substantial reductions in the size of our military forces, total manpower costs have risen sharply in recent years and now account for more than 50 percent of every defense dollar spent."

I think that is a highly significant statement and I assume, Mr. Secretary, it is the first time that that has been a fact, isn't it?

Mr. KELLEY. No, sir; it is not the first time. When I came into my job 3 years ago we had a force of 3.5 million military and 1.3 million civilians. In the year just preceding fiscal 1968, the manpower related costs were 42 percent of the total budget, and, as the forces declined, the percent of manpower to the total budget increased. So it has been true in each of the last 3 years.

Senator BYRD. That more than 50 percent

Mr. KELLEY. No, sir. It is true that the manpower percent of the total budget has increased.

Senator BYRD. Yes. But what I am speaking of, I was not aware that before this more than 50 percent of each defense dollar went to

manpower.

Mr. KELLEY. That has been true since fiscal year 1971. If you will refer to page 19, Senator Byrd, you will see that starting in fiscal year 1971 the percent of the total budget allocated to pay and related costs has been in excess of 50 percent.

Senator BYRD. Do you mean that for fiscal year 1973 the manpower costs will be 57 percent?

Mr. KELLEY. Fifty-seven percent of the outlays, 52 percent of the total budget authority.

Senator BYRD. Let me see if I can understand this now. Let us take the 57 percent. Does that mean that of every dollar which the Defense Department will spend in fiscal year 1973, that 57 cents will go to you? Mr. KELLEY. That is correct.

Senator BYRD. That is all the more reason. That is an astonishing figure. That is all the more reason, it seems to me, that you ought to reduce the number of military personnel we have. In other words, the American people now are buying a lot less defense than they have ever bought before. They are buying-for manpower-per-dollar-spent they are buying a lot less defense.

Mr. KELLEY. That, of course, is the reason why I was so anxious to discuss where these costs come from and some of the principal manpower issues that relate to costs.

Senator BYRD. Yes. And you have done it very ably.

Mr. KELLEY. Because it is not as simple as saying, "Let us chop off 100,000 people and we will save a lot of dollars." Certainly we would, but we would also have to reckon with our total international security commitments and some of the byproducts of sharp reductions in force such as turbulence.

Senator BYRD. How are you going to buy new equipment and new military materiel when you are now spending-you have gone from 52 percent to 57 percent in 2 years and the total outlays for manpower, and I assume that will continue to go up

Mr. KELLEY. No, sir. I think really the more significant trend figure is the manpower percent of the total budget authority, and as you can see, that hit a 53-percent plateau in fiscal 1971, 1972, and 1973.

Senator BYRD. Why do you say it is a better way to look at it? Mr. KELLEY. Because the budget authority represents the total plan of the Defense Department for a given fiscal year.

Senator BYRD. But the outlay

Mr. KELLEY. Even though some of the dollars are not spent during that year. In the case of

Senator BYRD. That outlay represents what you actually spend? Mr. KELLEY. That is correct.

Senator BYRD. In other words, if you spend $1,000, $570 is going for manpower, is that right?

Mr. KELLEY. That is right.

Senator BYRD. 57 percent.

Mr. KELLEY. But during the year in which 57 percent is going for manpower, the Defense Department commits themselves to procurement and other spending programs whose dollars will be outlaid in subsequent years. That is the greater significance of the lower figure. Senator BYRD. All right. We can argue between 52 and 57 percent. In any case, it is very, very high.

Mr. KELLEY. In any case it is.

Senator BYRD. In any case, the American people are buying less defense today for the same dollar than they have ever bought before.

Mr. KELLEY. I do not think one conclusion follows from the other. I think it follows from these figures that the manpower portion of the defense investment being made is more heavily weighted than it was earlier.

Senator BYRD. If they are buying less defense, they are bound to be buying less defense equipment per dollar.

Mr. KELLEY. It depends on how much of the defense capability is equipment and how much of the defense capability is manpower. The CHAIRMAN. I am sorry. Your time has run out.

Senator BYRD. Thank you very much.

The CHAIRMAN. Thank you Senator Byrd.

Let me say a word here for the record about these proceedings. Mr. Secretary, my information from our staff who has checked these matters out is that there has been a steadily rising percentage of the military dollar going for personnel and it is higher percentagewise now than it has ever been. I want to make a second point. In 1967 we switched over to what is called the unified budget, which includes all the trust funds, some of which are in the black, and created what I think are false and inaccurate figures. So, I want us to operate here on what I call the operating budget. That means the income and the outgo of the operations of the Government, not putting in the social security funds and others that are running in the black. We had that before the Appropriations Committee the other day and Mr. Shultz had the figures there and read them. It showed what the deficit would be under the so-called unified budget and then it showed what it would be under the operational basis budget, you know, income and outgo, the operations of Government, and according to his calculations, that deficit reached $38 billion.

When you go to comparing percentages here for prior years, we just have to use the operating budget because that is the only one reflected in the picture.

Senator BYRD. Mr. Chairman, as I understand it, the unified budget concept would not be involved in these figures because you are speaking only of the defense budget.

Mr. KELLEY. Yes, sir.

The CHAIRMAN. There are charts, though, that are put out by the Budget Bureau that show the percent of the Department of Defense appropriation is way down percentagewise. I think to use that is just not accurate because we have to compare them with the operating budget for years past. Putting those extraneous funds in there is just misleading. So, that is an observation and the staff will be governed accordingly in preparing figures for us.

Mr. KELLEY. Mr. Chairman, may I just comment briefly? I certainly do not want to leave the impression by my responses to Senator Byrd's very excellent questions that I disagree with his conclusion that we should be terribly concerned about the rising cost of manpower. I agree wholeheartedly with that conclusion, and I believe that we must take actions to reduce the manpower portion of the total DOD budget. The Chairman. All right. Thank you very much. I think we understand each other.

MANPOWER FOR GENERAL SUPPORT

Back to this matter of support. You have developed some good statements about it, but your statement indicates that the proportion of mil

itary manpower devoted to general support is significantly greater than it was in 1964. In 1964, general support required 45 percent of the active duty military personnel. It now requires approximately 47 percent. This seems to indicate that the vast buildup in support manpower which was needed for Vietnam has not yet been brought back down to the pre-Vietnam level. This 2 percent excess is a significant figure, nearly 50,000 men.

Why has the general support establishment which totaled 1,116,000 men, not been brought back down to at least the 1964 level? What is your reply or the reply of those who are with you to that?

Mr. KELLEY. I would like General DePuy to respond to that in the context of the Army portion of general support forces.

The CHAIRMAN. Make it quite brief now, if you will, and you can supplement your answer later for the record.

General DEPUY. The short answer is we are down below that in the Army. Second, in all categories of general support, with the exception of three, we are either at or below prewar level and going down. Those are medical services, the recruiting command, and the school instructors and overhead. In the latter case, Senator, we are level but we have expanded the recruiting. We have expanded the number of medical aides, not doctors, primarily, and in all other cases we are below the prewar level and going down in the Army. I cannot speak for the others. (Further information follows:)

The level of military manpower in General Support in FY 64 was approximately 1,208,000. The level of military manpower in General Support in FY 73 is programmed to be approximately 1,115,700. This is a decrease of 92,400 personnel. Additionally there are at least 51,100 individual billets included in General Support in FY 73 which were not included in FY 64. These include:

Excluding these additional billets from General Support yields a total deerease of 143,500 and a FY 73 General Support level of 1,064,700.

Indicates a change in the manpower accounting system rather than an increase in requirements. Includes personnel assigned to Unified Commands, and Defense and Federal Agencies.

Mr. KELLEY. Mr. Chairman, perhaps you would want to hear from Mr. Sullivan of Systems Analysis on the broader aspects of all services. The CHAIRMAN. I will tell you, gentlemen, when you have a lot of witnesses here, we just cannot go to all of them. I am going to have to leave in just a minute.

Senator Byrd, can you stay here a few minutes? I would like for you to provide, Secretary Kelley, you or your crew, a service-by-service breakdown of the average strength devoted to support in 1964, 1968, 1971, 1972, and 1973. The committee also needs this service-byservice breakdown in average strength for each of the other 14 manpower categories.

In other words, we are going to try to get into this important matter. We are not trying to embarrass you or the services. It is going to be gone into in debate and we need whatever answers you have that we can stand on.

Mr. KELLEY. Yes, sir.

(The information follows:)

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