On our second panel, we will have the uniformed chiefs of our National Guard and Reserve components. I will introduce them individually when we turn to the second panel.

The third panel will be representatives from the National Guard and Reserve associations. I will introduce them also when we get to the third panel.

Quite frankly, I hope we have not bitten off more than we can chew here this morning. We have a long, long witness list. We don't have a whole lot of time. I have a commitment at 12 o'clock, and I hope we won't have to put the second panel or third panel off to another hearing date, but we will try and move along as expeditiously as possible and get through the hearing this morning.

I will ask Mr. Duncan, Assistant Secretary of Defense for Reserve Affairs, to lead off, followed by Mr. Jehn, Assistant Secretary of Defense for Force Management and Personnel; Secretary Jehn is responsible for DOD oversight of total force requirements. Then I will ask Dr. Rostker to brief us on the status of the active and Reserve mix study mandated by Congress last year in the Defense Authorization Act for Fiscal Years 1992 and 1993. I believe Dr. Rostker's briefing will give us a good framework for understanding the complexities involved in determining the future size and composition of the relationship between our Active and Reserve forces. Mr. Duncan, if you would lead off, we would appreciate it.

STATEMENT OF HON. STEPHEN M. DUNCAN, ASSISTANT SECRETARY OF DEFENSE FOR RESERVE AFFAIRS, U.S. DEPARTMENT OF DEFENSE

Mr. DUNCAN. Thank you, Mr. Chairman. Thank you for including my prepared statement. As I usually do, you will note that I submitted a rather lengthy and comprehensive statement. I guess I followed the same pattern I always have. I tried to anticipate your areas of interest. Undoubtedly I addressed some issues which are not the subject of this hearing at all, but to the extent they are helpful, I submit them for your consideration.

Senator GLENN. Thank you.

Mr. DUNCAN. I might note just parenthetically and quickly that I prepared my statement before I received your March 30 letter which identified your areas of interest for this morning. So, if there are some things in my prepared statement that are unrelated, chuck them away. You may find them useful later.

Senator GLENN. Fine.

Mr. DUNCAN. Once again, of course, we welcome the opportunity to discuss what by any standard is a series of critical issues which we all must address as we discuss the future size, shape, and capabilities of the Reserve components. I have already heard many words this morning to which I personally subscribe and I'm sure everyone in the leadership of the Department of Defense subscribes. To describe what we are having to go through as painful, as Senator McCain did, is certainly accurate, but we also must recognize that the hearing we are engaged in this morning and the process we are engaged in takes place at a time which by any standard involves more changes than most of us can remember in our lifetimes. I've tried to note some of those changes in my writ

ten statement. I noted, for example, the President's description of the era which we have entered as one whose outline would have been totally unimaginable as recently as 1988.

The good news-and I've tried to describe that briefly since I described it at length last year-is that we start this discussion with some major advantages, not the least of which are the very, very high quality of the Reserve components. During the last 22 year period, our Reserve forces have contributed substantially to the successful armed conflict in Panama. They were critical to the victory in the Gulf war. They contributed to the end of the Cold War. They've assumed major responsibilities in the Nation's fight against the epidemic of illegal drugs, and they have also engaged in a wide range of other routine peacetime operations.

Of course, now we are engaged in the very difficult task of restructuring the Reserve components, along with the Active components, to meet tomorrow's needs, not those of yesterday. I can assure you, Mr. Chairman, we have not underestimated the difficulty of the task. The issue is complicated. I would suggest respectfully that the issue is considerably more complicated than some aspects of the public debate would suggest that it is. But it is simply too important to be delayed, and so we are getting on with it.

As I say, we start the debate with a formidable advantage: the high quality of the individual guardsmen and reservists, soldiers, sailors, and so forth who serve in the Reserve components. They're intelligent. The thing that is so surprising even to me after 20 something years doing this kind of stuff is the degree of motivation we have in the Reserve components. By any standard, it's absolutely remarkable what you would have found in individual Guard and Reserve units if you had looked at them right after Desert Storm. I will share briefly one anecdotal story to demonstrate the point.

Last year I testified before several committees about the concern that was expressed by many Members of the Congress about what would happen with recruiting and retention in the Reserve forces after Desert Storm when people fully realized that we were serious about this Total Force Policy, that we really would rely upon guardsmen and reservists. There was a special concern about people with critical skills like medical people, and physicians.

I was asked continually, what do you think, and at that time I said, "well, I don't know, but I would speculate that we have written the first several chapters" of what I described as the "book" on Desert Storm very well. The call-up was successful to a degree that no one could have imagined, and the performance of the Reserve forces was good. But I said at the time, "I guess the last chapter is still being written." I said that recruiting and retention would depend on whether we treat them as heroes when they come home and how will they perceive the sacrifices they made on behalf of the Nation.

Well, I am happy to report that we finally have some initial data about retention rates, and the astounding thing about that is that in every category, every occupational skill, the retention rates for those people who served in Desert Storm is higher than the retention rates for those people who did not. That says volumes about their motivation. They are leaders in their civilian communities, and most of them have considerable military experience.

Now, it is important to note that the process of restructuring this force is not dependent upon the congressionally mandated study that Dr. Rostker will talk about today. That is, of course, an independent study by an FFRDC. Mr. Jehn and I are looking forward to the results of that study, but our work must proceed even while that study is being conducted.

First of all, the results of that study would not affect the fiscal years 1992-1993 recommendations of the President, and, if we wait, frankly we will be faced with a potential steeper cut in the future. And we need the cost savings. We have certain budgetary imperatives that just require us to continue our work.

So, what are our objectives? Our objectives are straightforward I believe and they are simple. First of all, to achieve a balanced force structure and a mix of Reserve and Active forces that will meet the changing national security requirements, as well as the reduced defense budgets. Also, to ensure that the smaller forces of the future are well-trained, well-equipped, and ready; and to make sure that the required reductions in force structure are made in a logical, coherent fashion that relates to required warfighting capabilities. And finally, of course, and very importantly, we have to make those reductions in a way that is fair not just to the Guard and Reserve taken in the broad sense, but to individual National Guardsmen and Reservists.

I can assure you, Mr. Chairman, that in the process of asking the military departments to make professional judgments about what units are no longer necessary for the needs of the future, no State has been singled out. I am aware of no effort at all within the Department of Defense to single out any State or to do something that is perceived to be unfair. To the contrary, everybody is working exceedingly hard to do what is best for the Nation. As we went about the process, we relied upon the best professional judgment of those in the best position to know, namely, the military depart

ments.

As you know, Mr. Chairman, on March 26, Secretary Cheney forwarded to Congress a list of some 830 National Guard and Reserve units that will be reduced or inactivated during fiscal years 1992 and 1993. As the Secretary noted at the time, some 80 percent of those units have missions that are in support of Active component units which are also being eliminated. Both the Reserve and the active units had missions related to the defense of western Europe in the event of a major attack by former Warsaw Pact forces. Of course, we had the obligation back then, a treaty obligation, to provide 10 divisions within 10 days.

The remaining units that the Secretary referred to on March 26 are being eliminated because they are no longer required as a result of other changes in the security environment or perhaps in a limited number of cases-and it is a limited number of cases-because of changes in doctrine or other technical reasons.

It is important I believe to understand that the units that have been identified for elimination were identified by the people who have to fight in future conflicts and who have to provide the manrower. The military departments have made these decisions. They have been joined by the operational recommendations of the Joint Staff and the operational commanders through the Joint Staff.

I have personally monitored the methodologies which have been employed by the military departments to reach the decisions on which units performing what missions that require what skills can be eliminated. As I explained last year and the previous year, basically the challenge is to weigh cost versus risks. We must ask what cost savings might be achieved by moving a particular mission to a Guard or Reserve unit and what risk, if any, might be associated with such a move? In many cases, there is no risk whatsoever because the mission can be performed perfectly well by a Guard or Reserve unit. In some cases it can be performed, maybe many cases, better, but there are some missions that are absolutely more appropriate for Active duty forces. So, we go through a cost-risk process as we make those decisions.

I am satisfied that the methodologies and the processes that were followed by the military departments were reasonable and appropriate, and the process within each service typically included-and I asked questions about this in detail-a consideration of a wide range of several factors. I have discussed several of those factors in my written statement, but they included such factors as the current readiness of individual units, demographic facts that might affect recruiting and retention, the proximity of important training and other facilities. For example, if a particular unit is near a major maintenance regional training site, that should affect and did affect some decisions.

The military departments looked at the support that is available for specific units from other kinds of units in the area. They looked at the impact on the personnel involved. They looked at the importance of individual units to the new mission requirements, and to the extent that it was possible to do so, considering warfighting requirements first. I am satisfied also that the National Guard Bureau particularly looked at the impact on the ability of individual States to perform their State or Title 32 missions, understanding that the first requirement we must look at always is our warfighting for the future conflicts the Nation may have to fight.

Now that Secretary Cheney has decided which Reserve units and Guard units can be inactivated, we are focusing on the manpower impact and implications of those reductions. As with the reduction of the Active forces, we want to avoid or at least minimize to the greatest extent possible any need for involuntary separations. We want to encourage, where it is consistent with our new military requirements, retirement of National Guardsmen and Reservists who may be eligible for retirement. We also have an upward mobility challenge.

And of course, the needs of the individual Reserve components vary. For example, in the Air Reserve components, some of your more senior people are the very best and most experienced pilots. I personally talked to, for example, the 926th Tactical Fighter Group in the Air Force Reserve. They had a bunch of old Vietnam veterans who were one hell of a group of good pilóts when it came to Desert Storm. In the Marine Corps, on the other hand, there is a real challenge to make sure that there is a perception of upward mobility, and they also want young and conditioned people who perform different kinds of warfighting skills. So, we have different challenges within each of the Reserve components.

We also are very strongly committed to trying to find new units for the individuals who are in the units that are being eliminated. That is to say, just because a unit may be eliminated because the mission for that unit is no longer required, it does not mean that all of the people in that unit are necessarily going to be leaving the Reserve force. We are looking for the highest quality Reserve force we can have, and it may be that we can take some of those individual Guardsmen and Reservists who were in unit A and have them transferred to unit B.

The challenge of this, of course and it is one that is obvious-is that sometimes unit B is not a local unit near the place where a particular reservist's civilian work place is. We don't have any handle yet on to what extent we will be successful in helping people find new units because it may require travel. It may require other kinds of sacrifices, and we will just have to wait to see. But we are committed to doing that to the extent that we can.

Work is already under way, Mr. Chairman, to identify within each Reserve component and as soon as possible a whole litany of manpower challenges that are a function of the unique nature of the individual Reserve components. I will be meeting in the next several days with the Assistant Secretaries from the military departments and the Reserve Chiefs just on this issue.

Now, once we have identified the challenges, we will address through policy changes or, believe me, we will be prepared to recommend through proposals for legislative change to the extent we think legislation is necessary. The scope of some of the manpower consequences may not be known for a while. For example, how difficult will it be for us to find new units for the people who wish to remain in the Reserve forces who have skills that we think are critical who are not close to retirement, people we really want to keep to make that we have the best forces? How much of a challenge will that be? I just don't have a handle on that since we just made the decision on which units will be coming out of the force structure. But we are working hard to obtain the answers.

As we go about this complex, difficult process, I think it is important that we not lose sight of some very important and very relevant facts. First of all, it is important to remember that even with the reductions that were announced by Secretary Cheney on March 26, the Reserve components will still be 6 percent larger than they were in 1980. Even by fiscal year 1995, the total end strength of the Reserve components will be 50,000 greater than in 1980. Even by fiscal year 1997, and despite the reductions that the Secretary announced on March 26, the Reserve components will still constitute 36 percent of the entire Total Force, the same as it is today.

And for those on the committee who are interested, as all of us are, in the question of how these reductions might affect the ability of individual States, in the case of the Guard to perform their Title 32 missions, I might simply note that if you look at the data for military end strength for fiscal year 1977, it shows that the total National Guard end strength, counting Army National Guard and Air National Guard, in fiscal year 1977, was 446,500. If the reductions that the Secretary announced on March 26, if they are carried through and we reach exactly what the President has proposed at the end of fiscal year 1997, the total military end strength