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year 1990 and fiscal year 1992, using every possible voluntary, and some not so voluntary, means available. Couple this with the almost daily assortment of news articles and interviews calling for even deeper cuts and it's easy to understand the increasing uncertainty and anxiety among the men and women who make up our allvolunteer force.

Following congressional guidance to use voluntary measures before using involuntary measures, we are using a balanced approach in our force reduction game plan. To some extent we are victims of our own success. In the past we have worked hard to improve retention by making the Air Force an attractive way of life. These very retention efforts, coupled with a sluggish economy, are now complicating efforts to draw down the force.

Constraining accessions has, in the past, been the primary method of force reduction. With an eye toward future reductions, the Air Force began reducing accessions in 1986, dropping from over 74,448 to 35,230 (52.7 percent) by fiscal year 1991. A policy of constrained accessions adds flexibility to reduction plans. However, it does not provide for proper sustainability of the force needed for future years.

In addition to reducing accessions, the Air Force implemented early release programs, liberalized active duty service commitment waivers, and tightened reenlistment controls to avoid involuntary separations. These programs have been successful in meeting past end strength reductions, but the number of voluntary losses continues to decrease, as the eligible population shrinks. We will undoubtedly continue to have voluntary separations, however, most of the people who were undecided about staying for a career already opted to leave. Consequently, traditional voluntary separations will not achieve the required future loss rates.

The Air Force also lowered the high year of tenure for mandatory retirement for Technical Sergeants, Master Sergeants and Senior Master Sergeants and lowered the high year of tenure separation point for Sergeants from 20 years to 10 years. We conducted Selective Early Retirement Boards for Colonels and Lieutenant Colonels in fiscal year 1989, fiscal year 1991 and fiscal year 1992. These are important force reduction strategies and we will continue to utilize them, if necessary, throughout the drawdown period. However, in the view of careers personnel, these programs are not considered voluntary and have a very negative impact on morale. A year to year contract for senior leaders is not a policy we're happy with.

The Voluntary Separation Incentive (VSI) and Special Separation Benefit (SSB) programs, authorized by Congress, provide a flexible force shaping tool that is substantially impacting our requirement for future involuntary separations. The Air Force has targeted the VSI/SSB program in an effort to encourage voluntary losses among mid-career individuals who are not retirement eligible. However, funds were not appropriated for the VSI/SSB program, consequently reprogramming will be required to support the payments. We appreciate the support of Congress in authorizing these programs as a means of avoiding involuntary separations.

The VSI/SSB program is a welcome management tool. Certainly it helps to minimize the perception of breaking faith with eligible members who might be required to separate prior to retirement. However, it is not a panacea. The number of individuals willing to voluntarily accept VSI or SSB is limited, influenced to a great degree by employment opportunities in the civilian sector. We anticipate that sufficient numbers of enlisted members will accept VSI/SSB to meet end strengths, avoiding a RIF for enlisted personnel in fiscal years 1992-1993 as long as end strengths are not cut further. However, the VSI/SSB take rate for officers currently falls short of the number necessary to avoid an officer RIF. We may need to conduct an officer RIF board in fiscal year 1992 to effect reductions in fiscal year 1993 if there is not a significant increase in the number of officers who accept VSI/SSB. To the extent force reductions increase significantly, we would need to address incentives to facilitate a greater number of voluntary losses, particularly among members who are approaching retirement eligibility.

Civilian Drawdown: Civilian personnel resources are also being reduced, concurrent with military end-strength, as the Air Force reorganizes to respond to the new strategies outlined earlier. From fiscal year 1986 through fiscal year 1992 we will have experienced a 17 percent reduction in civilian personnel, equating to a decrease of 45,000 people. In addition, we anticipate a further reduction of about 4,500 in civilian strength during fiscal year 1993. For fiscal year 1992, these losses will be accomplished through hiring limitations and attrition, with only a small number of involuntary losses driven by realignments and early base closure actions. Hiring limitations currently in effect allow two replacements for every five losses. In fiscal year 1993 programmatic changes and base closures will drive reduction numbers beyond hiring limitations and attrition, forcing us to utilize modest involuntary methods (RIF) to achieve necessary reductions. Our biggest challenge on the civilian

side, as with the military, is to minimize the adverse impact to people. Programs, such as the Priority Placement Program, have served us well in the past, and when added to new programs such as the Defense Outplacement Referral System, will continue to serve us well in the coming years. The Job Training Partnership Act, designed to facilitate a cooperative effort between the Department of Labor (DOL) and DOD, is working extremely well at some locations, providing training for displaced civilian personnel. We look forward to working with the DOL to Standardize opportunities for eligible civilians at all affected locations.

However, as we look to the future, the picture for our civilian workforce is somewhat mixed. Because there will continue to be a strong role for civilians in the Air Force, we must strive to recruit and retain high quality employees. Implementation of the Federal Employee Pay Comparability Act will help in the recruitment of employees in hard to fill jobs.

We appreciate your continued support for our civilian personnel programs and employees. The repeal of the end-strength ceilings on our stateside work force has provided us a welcome opportunity to support our workloads without artificial constraints. However, civilian ceilings on overseas employment, both U.S. and foreign national, remain in effect, denying us the flexibility to support expected readiness and sustainment levels for Air Force units overseas.

Transition Assistance: The Air Force Transition Assistance Program has continued to grow and improve since its implementation in May 1991. Many of its services have been expanded to cover family members and civil servants as well as active duty personnel. Benefits for military members involuntarily separating include a 2 year extension of commissary and BX privileges, extension of on-base-housing, and excess leave or permissive TDY for job/house hunting. Additionally, the program provides a nonappropriated fund employment preference, Montgomery G.I. bill extension, and extension of health care coverage. Eligible individuals are also offered attendance at a 3 day seminar teaching job hunting skills, enrollment in the Defense Outplacement Referral System, a mini-resume referral service, and a "transcript" documenting job skills and training.

Recruiting: The Air Force continues to enjoy success in recruiting enlisted personnel. This is reflected in the caliber of men and women we access every day. The Air Force is dedicating fewer dollars to recruiting, but that doesn't mean we aren't concentrating on maintaining the quality of our recruiters and recruits. The 18 to 24 year old population has declined 6 percent over the last 4 years and is expected to decrease 5 percent more over the next 4 years. The future of the Air Force still rests on the youth of today. Recruiting in the health professions continues to pose a critical challenge. The Air Force has not met its physician recruiting goal since fiscal year 1987, or its nursing specialists goal since fiscal year 1988. In fiscal year 1991, for the first time in our history, we failed to access enough Biomedical Science Corps officers to meet our requirements. We have diverted a significant portion of our limited resources from enlisted to medical recruiting. The number of medical recruiters was increased by 160 percent from fiscal years 1988-1991. With regard to advertising for recruits: we have cut our budget by 63 percent since 1990; over 60 percent of the budget is spent on recruiting health professionals; we do not purchase television advertising; and we continue to rely heavily on joint-service advertising and mailings to create awareness of our program.

Officer Promotions: In 1990, a review conducted by the Office of the Secretary of Defense found the Air Force deficient in the general officer promotion process. Since that time, we have made important changes in the way we promote our senior leaders. Secretary Rice and General McPeak felt it was important that our process be open, understandable, and one which future leaders of the Air Force can rely on. Using these guidelines, Air Force Regulation (AFR) 36-9, General Officer Promotions and Evaluations was published in February 1991 and further updated in November 1991. Also immediate interim changes, specifically worded to ensure compliance with DOD Directive 1320.12, were made to AFR 36-89, Promotion of Active Duty List Officers. A special task force is completing a new Air Force regulation in response to the Fiscal Year 1992 National Defense Authorization Act and a February 4, 1992 DOD directive change. Appropriate changes will also be made to the general officer selection process to ensure compliance with DOD directives and law. No central selection boards will be held until new regulations are in place.

Pilot Management: Pilot retention is proving to be one of the Air Force's most difficult personnel challenges. Despite a slower economy, hiring by the civilian airlines continues at a pace that virtually assures employment for all pilots who want to leave the Air Force. Pilot retention rates-less than 40 percent in recent yearsare far below the 60 percent continuation needed to sustain the long-term force.

The rapid force drawdown pushes downstream the substantial pilot deficit the Air Force had been projecting for fiscal year 1993. Ironically, the drawdown makes it even more difficult to solve the coming inventory problem. The fact is, force structure cuts only delay the day when low retention will take its inevitable toll. With current retention, even after the drawdown, we are projecting a shortfall of 3000 pilots by fiscal year 1997. There are only two ways to address that hard fact-grow more pilots or increase retention.

The reality is that the drawdown has dramatically reduced our capacity to grow new pilots. Because our pilot training program was geared for a larger force, we now have substantial backlogs of pilot training graduates waiting to be absorbed into much smaller numbers of cockpit vacancies. With only limited flexibility to increase absorption into the force and no money available to train more new pilots than we can absorb, we have had little choice except to reduce pilot production for the short term as we attempt to liquidate the backlog. Unfortunately, this forced reduction in inputs can only make the long term problem worse.

With constrained capacity to grow new pilots, we must place an even increased premium on retention, and the pilot bonus is crucial in this effort. We must continue to offer this important incentive to at least partially offset the growing economic draw of the airlines. In the meantime, we must find additional ways to make the Air Force a place in which more pilots want to stay. A centerpiece of this effort is our recently implemented voluntary assignment system that gives younger officers the principal voice in their assignment process.

One additional thing we can do to ease our long term inventory problem is to release some of those pilots who, despite our offers of retention incentives, tell us they will leave in the next few years. These pilots will be gone by the time our serious inventory deficit arrives, and they are taking up cockpits that we need to experience new pilots who will be with us for the longer term. By selectively releasing those pilots today and replacing them with new ones, we can enhance our inventory posture for the outyears.

Compensation: We very much appreciate the congressional support given to Air Force members in the compensation arena, both in terms of assistance for those leaving and in assuring fair compensation for those remaining. Compensation plays an integral part in our recruiting and retention efforts. Although we do not have a problem attracting and retaining sufficient numbers of people today, without an adequate compensation package, we are unable to attract and retain the quality of people we need to fill all of our requirements. In fact, we are already seeing a decrease in the number of high quality people entering the Air Force. Without a bonus for highly sought after pilots, we will see them leave the Air Force, each taking with them an investment of $1-$3 million in experience and training. It seems rather short sighted to let millions of dollars in experience escape, rather than pay a bonus of approximately $84 thousand to retain that pilot through his or her 14th year of service.

Military pay continues to be a significant factor in our efforts to attract high quality recruits and retain professional career personnel. To succeed in this era of force reductions and fiscal restraints, we must be able to assure people of our commitment to the well-being of the Air Force family. Nothing signals the depth of that commitment more than the value we place on our people.

As mentioned earlier, continued authority to pay Aviator Continuation Pay (ACP) is critical in improving retention among our pilots. The same urgency applies to the Selective Reenlistment Bonus (SRB) and medical special pays. SRBS are paid to individuals in career fields with serious undermanning, persistent shortages or high replacement cost, and/or are defense essential. The amount of bonus paid is directly related to the reenlistment rate in that specialty. The medical bonus program is essential in our efforts to retain medical specialists, a problem of increasing proportions.

Health Care: Health care continues to be a key benefit to Air Force families. While members are generally pleased with the quality of care, there is concern about the continued availability of such care. This concern can be attributed to the overall reduction of the force and the personal impact on individuals choosing to separate under voluntary separation programs. Although there are authorized transition benefits, the loss of health care benefits are a major factor in many separation decisions.

As we struggle to conserve health care resources through their realignment under ASD(HA) and the implementation of managed care programs, it becomes imperative that we educate our beneficiaries to their new alternatives for care. At the same time, it is equally important that we maintain acceptable staffing levels in Air

Force medical treatment facilities, because we firmly believe that we can most efficiently deliver quality care in the direct care system.

CONCLUSION

The fundamental changes in the world order today make it imperative that we make fundamental changes in the management and operation of our military forces. The Air Force has fully accepted this challenge and, as a result, is in the midst of restructuring from the ground up. We are reviewing our operation with an eye toward streamlining processes, cutting away at the bureaucracies, and empowering our people to do their jobs. However, as we draw down our forces, we must not lose sight of our primary responsibilities: we must remain strong and ready to support our Nation's national security objectives. We can all remember the post Vietnam years and the hollow force. None of us wish to return to that era, especially with our Desert Storm experience so rich in lessons learned. As we continue our force drawdown, we must continue to support both our people and their families and the combat capability necessary to preserve freedom.

For those who have served this Nation honorably and are leaving, I ask your help in providing every assistance in easing their transition into the civilian sector. For those who are staying, we must make sure they are adequately compensated for their dedication.

I stand ready to work with the Members of Congress as we grapple with the myriad of personnel issues facing us today.

Senator GLENN. Thank you, General, and thank you all, gentle

men.

I want to turn now to our GAO witnesses, and have them brief the subcommittee on the strength and plans of the military services for fiscal years 1992 and 1993. The GAO has been working with each service in developing this briefing. My intention in having this briefing is so that our members can raise any questions they wish with regard to the effect of the strength levels requested by DOD for the fiscal years 1992 and 1993 on personnel and especially on involuntary retirements and separations.

We all know there is a lot of pain associated with a drawdown like this, and we should know how much pain is involved. So Mr. Jones, please go ahead with your briefing.

STATEMENT OF PAUL L. JONES, DIRECTOR, DEFENSE FORCE MANAGEMENT ISSUES, NATIONAL SECURITY AND INTERNATIONAL AFFAIRS DIVISION, GENERAL ACCOUNTING OFFICE; ACCOMPANIED BY BARRY W. HOLMAN, ASSISTANT DIRECTOR, DEFENSE FORCE MANAGEMENT ISSUES, NATIONAL SECURITY AND INTERNATIONAL AFFAIRS DIVISION, GENERAL ACCOUNTING OFFICE

Mr. JONES. Thank you, Mr. Chairman. Mr. Chairman and Senator Nunn, I am pleased to be here today to discuss the status of the military force reductions.

Accompanying me today are Mr. Barry Holman, my assistant Director and Mr. Dave Moser, the evaluator in charge of this review. I appreciate including my prepared statement in the record.

What I am briefing today is preliminary information from our ongoing review which you requested. I will comment on the status of military force reductions, programs designed to encourage voluntary separations, the extent of reduction by various separation categories, and funding for two special separation incentive programs. I now direct your attention to the screen or page 2 of my prepared statement. You might not be able to see the screen from where you sit, so page 2 shows the same information.

[Slide.]

This slide compares DOD end-strength authorized for fiscal year 1991 with DOD currently planned end-strength levels. It shows that Congress authorized a fiscal year 1995 military end strength of 1,613 thousands and DODs currently planned end strength is 1,644 thousands. This planned reduction represents a 24 percent decrease in the strength from fiscal year 1987.

Reductions planned between fiscal year 1995 and 1987 will yield a 25 percent reduction from 1987 to 1997. As you can see, except for the Marine Corps each service planned end strength exceeds the congressional authorized level by a few percentage points. However, in exceeding those authorized levels, service officials have said that the conference report permitted some flexibility.

[Slide.]

As you can see from this chart, which is also shown on page 4 of my statement, at the end of fiscal year 1991, the active military force had been reduced by about 189,000 to 1,985,500, from a high of 2,174 thousands at the end of fiscal year 1987. Note that about half of the total force reduction is planned to come from the Army, as alluded to by General Carney.

[Slide.]

DOD plans a net reduction of just over 218,000 within the current 2 year budget period. This viewgraph which is also shown on page 5 also shows current service end strength plans for these 2 years in relation to the strength level authorized by the National Defense Authorization Act for fiscal years 1992 and 1993.

As you can see, DOD plans to exceed the target force goals in fiscal years 1992 and 1993. DOD and the services are trying to achieve and maintain a degree of balance between accessions and losses in order to shape the military force in terms of rank, years of service and specialties.

To do this, the services have taken several actions which I will discuss later.

[Slide.]

The chart before you and also on page 7 shows the extent of gains and losses projected by each service for fiscal years 1992 to 1993. As you can see, during the 2 year period, DOD expects net reduction, that is gains minuses losses, totaling about 218,000 positions. Total losses during this same period total about 716,000that is total losses, net losses are about 218,000.

However, during normal times without downsizing, there would be losses on the order of about 300,000 per year or about 600,000 for 2 years. According to OSD officials, of the 218,000 net reduction, approximately 140,000 are additional reductions over what would have occurred without the downsizing, plus approximately 80,000 fewer accessions.

Conferees to the fiscal year 1991 authorization legislation expected that in making end strength reductions, the services would maintain the same relationship between officer and enlisted strengths as existed prior to 1990.

[Slide.]

This viewgraph which is shown on page 8 shows some variance, but overall, the officer to enlisted ratio approximates the 1990 officers to enlisted ratio.

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