PERMANENT CHANGE OF STATION (PCS)

QUESTION: The FY 1982 estimate included in the FY 1983 budget submission for PCS is nearly $44 million above the FY 1982 actual reflected in the FY 1984 budget submission. Please explain this large reduction.

ANSWER: During the execution of the program, savings of approximately $44 million were identified: 1) household goods shipment costs were lower than budgeted ($17.0M), 2) actual operational and training moves were lower than programmed ($12.3), 3) savings associated with TLE ($5.2)*, 4) the per diem equity change by Congress which prohibited double payments to enlisted personnel, therefore enlisted on PCS began receiving $45.50 instead of $50 per diem ($4.0) and 5) fewer moves in officer and enlisted separations ($5.4M). FY 82 surplus PCS funds were used as a source for reprogramming to other Air Force and DoD accounts and for offsetting the pay raise. The FY 83 program was reduced via Congressional mark, and the FY 84 program was reduced by the Air Force.

* FY 82 program included $19.1 for TLE. Air Force supplemental request was for $13.9 to fund this entitlement. The Air Force had $5.2 available. When TLE was not approved, it caused $5.2 surplus.

QUESTION: Will there be additional operating costs for this deployment?

ANSWER: The operating funds budgeted for the nondeployed fleet will finance the training operations of ships deployed to Central America. Accordingly, there is no incremental additional cost over budget for the current level of naval support involved in sending a carrier task force to Central America.

QUESTION: Are these costs in the FY 84 budget already? ANSWER: The FY 1984 budget for the nondeployed fleet includes funding for a variety of training exercises. These exercises are normally conducted in diverse areas, including the Northern Pacific, Caribbean or any area designated as nondeployed fleet command areas. If extensive commitments should develop in the nondeployed fleet command areas, sane training evolutions would have to be postponed or cancelled.

QUESTIONS SUBMITTED BY SENATOR KASTEN

G.I. BILL

QUESTION: I recently cosponsored an Armstrong Amendment to the DoD Authorization Bill that would have restored the G.I. Bill. Opponents argued that such a bill would exacerbate retention problems by providing an incentive for a serviceman to leave the military in order to take advantage of his education benefits. My own belief is

that this amendment was written in such a way as to minimize the problem. What is your position on a new G.I. Bill? I realize that at the present the Services are having no trouble recruiting high quality individuals. But what about the long run? Under what circumstances would you recommend the implementation of a new G.I. Bill? ANSWER: Our position is that a new G.I. Bill is not required at this time because our current recruiting and retention results are excellent. The recruiting and retention incentives we have in place now are working well.

Our current educational benefit program, the Veterans' Educational Assistance Program, does not offer enlisted members benefits as lucrative as those provided by the G.I. Bill of the Vietnam-era, but does offer a valuable opportunity for those who wish to attend college. The supplementary benefits targeted to selected skills in the Army have improved force manning at an attractive price to the taxpayer.

There is no question that in the long run, as the economy improves and the youth population declines, recruiting and retention will become more difficult. I would recommend that mix of additional recruiting and retention resources which, I believe, will most effiicient alleviate the force manning problems as they arise.

These additional resources might very well include a new G.I. Bill. However, proponents of the use of educational benefits to improve recruiting should recognize that there is at least the potential for these benefits to have an adverse effect on retention. In fact, we have some evidence that the Vietnam-era G.I. Bill may have reduced the first term reenlistment rate in the Navy by as much as 20%. Perhaps some of the features present in the new G.I. Bills that have been proposed, such as the opportunity to transfer the benefits to dependents, may offset these adverse retention incentives. However, these additional features are costly and may not, in fact, offset the powerful incentive to separate in order to attend college. Moreover, the efficiency of using a new G.I. Bill to improve recruiting should be compared to other incentives, such as enlistment bonuses, that do not have negative effects on retention.

We will have more evidence on the retention effects of education benefits as we examine the reenlistment behavior of enlisted members who were eligible for VEAP kickers. It may be that the best way to adjust to future manning problems is the institution of a new G.I. Bill. But, we don't know now what the nature of future manning problems will be nor do we know as much about the effects of educational benefits as we would like. We often are forced to make decisions or recommendations with less information than we would like but, fortunately, our current force manning conditions make the price of deferring a decision in this case very attractive, while the benefits of deferring a decision are potentially large.

NAVY PETTY OFFICER SHORTAGE

QUESTION: The Navy has embarked on a program to build and maintain 600 ships. While I believe this is a necessary enterprise, I wonder about the ability of the Navy to man all these vessels. I understand that the Navy itself has raised this issue. The real concern, as I understand it, is the projected shortage of petty officers and some specialists. Do you think this is a legitimate concern? If so, what can be done about it?

ANSWER: As the economy improves, we face a real challenge to continue with the retention levels we have experienced recently. However, we and the Navy are convinced that with the proper level of pay incentives, bonuses, and educational incentives; attention to quality of life issues; and adequate resources for recruiting, we can attract and retain enough qualified men and women to meet the Navy's personnel needs. With your support, the petty officer shortfall will be corrected by FY86, and the 600 ship Navy can be manned as programmed by 1990.

INCREASED MANPOWER REQUIREMENTS

QUESTION: There are a number of new systems coming into the inventory that will require additional military personnel. The Ground Launched Cruise Missile (GLCM) deployment is a good example. What are your plans to accommodate these increased requirements if the force structure is constrained to the fiscal year 1983 level?

ANSWER: Our manpower program has been structured to support the programs and weapons systems requested in the budget. If the manpower force structure is constrained to the fiscal year 1983 level, causing an approximately 37,000 shortfall in active military manpower, we will, of course, have to reassess the allocation of the authorized end strength to specific programs. The Services and OSD will have to review the priority of systems and programs and then allocate available manpower authorizations accordingly. Reductions will affect our long-term goal to increase readiness and may affect the effective fielding of some systems.

USE OF RESERVE FORCES

QUESTION: There is a great deal of interest in furthering the use of the Reserve forces to accommodate the increased workload. Do you believe there are economies that can be achieved by using Reserve and Guard units for missions that were previously performed by the active forces?

-- as

ANSWER: Yes, there are prospective economies in the selective use of Reserve and Guard units for missions previously performed by the active forces well as for new force growth. Not all functions can or should be performed by Reserve or Guard units. The selection and implementation of the optimum mix of Active Component and Reserve Component units is an important and challenging issue which is receiving increasing attention.

CURRENT MANNING OF RESERVE FORCES

QUESTION: Do you believe that the current manning of the Reserve forces allows their accepting additional missions?

ANSWER: Adding missions to the total force is something that must be done on a case-by-case basis. Whether a new mission capability is added to the active force or the Reserve forces depends on many things. It is unlikely, however,

that either the active or Reserve forces could accept any new mission without at least some additional manpower.

ANSWER:

QUESTION: Approximately 41% of the total force of military personnel are members of Guard or Reserve units. This is up considerably from the 1980 level of 29%. Just how high a percentage mix of the total force do you believe it is prudent to assign to members of the Reserve forces? Missions are not allocated to the Reserve forces on a "percentage mix" basis. Rather, numerous factors, including readiness, must be weighed on a case-by-case basis before a decision can be made on which component of the total force should be given a particular mission capability. Thus, the "percentage mix" is merely a result of the decision process and not something that can or should be explicitly addressed in making total force decisions. Moreover, the quoted number is an average across all Reserve Components and across all mission areas, whereas the "mix" actually varies widely with mission and component.

Very little of the 1980-1983 increase in the "percentage mix" actually resulted from adding missions to the Reserve Components. Rather, it is a reflection of this Administration's efforts to correct the serious Reserve manning shortfalls inherited from the previous administration.

QUESTION: The policy of DoD in the past has been to consider active military manpower as the last resort when filling support manpower requirements. Does this continue to be true?

ANSWER: Yes, it does. Our policy is to provide for the support as inexpensively as possible, within the constraints of the requirement. Since active military manpower is the most expensive means of providing support, it is the last resort and is used only when there is an overriding reason for the unit to be active, such as to maintain the unit in a ready status overseas.

MANNING REQUIREMENTS

QUESTION: The 600-ship Navy is just over the horizon. Is it your view that sufficient personnel assets are going to be available in the All Volunteer environment to accommodate the manning requirements?

ANSWER: The President's Military Manpower Task Force examined this question and concluded that, despite a rising requirement for petty officers and the current shortage, full requirements can be met. A key to meeting future personnel requirements is that the compensation package we offer to military personnel, both first term and career members, remains competitive. It is likely that our recruiting and retention goals will become more difficult to meet as the economy improves and the population of recruit-age people declines. However, if we choose that mix of recruiting and retention resources that is best suited for the task, we believe that we can meet this challenge, and maintain an All Volunteer Force at a reasonable cost to the taxpayer.

SUBCOMMITTEE RECESS

Senator STEVENS. The Defense subcommittee will stand in recess until Saturday, July 23 at 9 a.m., when we will meet for a field hearing in Biloxi, Miss., to receive testimony on Department of Defense participation in drug interdiction programs.

[Whereupon, at 12:14 p.m., Thursday, July 21, the subcommittee was recessed to reconvene at 9 a.m., Saturday, July 23, 1983.]