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Defense Budget: Trends in Reserve Components' Military Personnel Compensation Accounts for 1990-97 (Letter Report, 09/19/96, GAO/NSIAD-96-226).

GAO reviewed the Department of Defense's (DOD) reserve components'
military personnel compensation accounts, focusing on: (1) the various
pay categories; (2) trends in those pay categories; and (3) how changes
in the DOD budget compared with changes in service force levels.

GAO found that: (1) the decrease in the reserves components' military
personnel budgets closely follows the decrease in reserve personnel; (2)
the majority of military reserve personnel accounts are comprised
primarily of unit and individual training and administration and support
costs; (3) despite an overall decline in the reserves components'
military personnel budgets, servicemember costs are projected to
increase for all components except for the Army National Guard; (4)
basic pay and allowances for quarters, variable housing, travel, and
other costs comprise about 82 percent of the National Guard's military
budget and about 80 percent of the Reserves budget; (5) there are
differences among the services in the pay, allowances, and travel
categories; and (6) some reserves components' budget categories are
disproportionate with personnel levels.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-96-226
     TITLE:  Defense Budget: Trends in Reserve Components' Military 
             Personnel Compensation Accounts for 1990-97
      DATE:  09/19/96
   SUBJECT:  Military budgets
             Military downsizing
             Military reserve personnel
             Military training
             Military pay
             Future budget projections
             Military expense allowances
IDENTIFIER:  Defense Business Operations Fund
             
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Cover
================================================================ COVER


Report to the Chairman, Subcommittee on National Security, Committee
on Appropriations, House of Representatives

September 1996

DEFENSE BUDGET - TRENDS IN RESERVE
COMPONENTS' MILITARY PERSONNEL
COMPENSATION ACCOUNTS FOR 1990-97

GAO/NSIAD-96-226

Defense Budget

(701097)


Abbreviations
=============================================================== ABBREV

  DOD - Department of Defense
  ROTC - Reserve Officers' Training Corps

Letter
=============================================================== LETTER


B-274130

September 19, 1996

The Honorable C.W.  Bill Young
Chairman, Subcommittee on National Security
Committee on Appropriations
House of Representatives

Dear Mr.  Chairman: 

The Department of Defense's (DOD) budget request for fiscal year 1997
includes almost $70 billion for pay and allowances for active and
reserve military personnel, which represents about 30 percent of
DOD's total budget request.  DOD estimates that in 2001, pay and
allowances will continue to represent about 30 percent of the total
budget.  Because the military personnel accounts represent such a
large share of DOD's budget, we reviewed them to determine (1) the
various pay categories included in the accounts, (2) the trends of
those pay categories, and (3) how changes in the budget compared with
changes in service force levels.\1 We also inquired into the reasons
for some of the service trends and differences among the services and
have included the explanations when available. 

Our analyses and discussions in this report focus primarily on pay
and allowances for the reserve components, which for fiscal year 1997
comprise over $9 billion of the $70 billion requested.  We reported
separately on the active components because the budget categories for
the active are considerably different from the reserve components.\2

Our review was performed under our basic legislative
responsibilities.  Because of your expressed interest in the military
personnel accounts, we are addressing the report to you. 


--------------------
\1 Our analysis used actual obligations for fiscal years 1990 to 1995
and budget estimates for fiscal years 1996 to 1997. 

\2 Defense Budget:  Trends in Active Military Personnel Compensation
Accounts for 1990-97 (GAO/NSIAD-96-183, July 9, 1996). 


   BACKGROUND
------------------------------------------------------------ Letter :1

Military pay and allowances for active and reserve personnel are
funded through the military personnel accounts.  Military personnel
is one of six major account groups for DOD.\3 It is the second
largest of DOD's account groups after operation and maintenance and
is expected to remain second through 2001. 

The major budget categories for reserve component military personnel
accounts are unit and individual training; administration and
support; other training and support, including mobilization training,
school training, special training, Army branch officer's basic
course, health professions scholarship program, Junior Reserve
Officers' Training Corps (ROTC), and Army chaplain candidate program;
education benefits; and Senior ROTC.\4 These categories are listed in
detail in appendix I. 

The reserve components of the Army and the Air Force include both the
National Guard and the reserves.  These components account for about
85 percent of the total reserve personnel.  The Navy, the Marine
Corps, and the Coast Guard have only reserves.  Because the Coast
Guard Reserve is a small force--about 8,000 personnel in 1996--and is
under the Department of Transportation, it was not included in our
analyses.  The change in personnel levels for each of the reserve
components between fiscal years 1990 and 1997 is shown in table 1.\5



                                Table 1
                
                   Personnel Levels for DOD's Reserve
                               Components

Reserve component                             1990    1997  Difference
------------------------------------------  ------  ------  ==========
Army National Guard                         436,96  366,75    (70,206)
                                                 4       8
Air National Guard                          116,96  108,01     (8,950)
                                                 8       8
======================================================================
Total guard                                 553,93  474,77    (79,156)
                                                 2       6
Army Reserve                                299,14  214,97    (84,175)
                                                 5       0
Air Force Reserve                           80,602  73,281     (7,321)
Naval Reserve                               149,35  95,941    (53,411)
                                                 2
Marine Corps Reserve                        44,530  42,000     (2,530)
======================================================================
Total reserve                               573,62  426,19   (147,437)
                                                 9       2
======================================================================
Total guard and reserve                     1,127,  900,96   (226,593)
                                               561       8
----------------------------------------------------------------------
Note:  Personnel levels are for the selected reserve.  Fiscal year
1990 end strength excludes personnel serving on active duty in
support of Operation Desert Shield. 

Source:  Services' budget estimates. 

The distribution of personnel budgets by component for fiscal years
1990 and 1997 is shown in table 2. 



                                Table 2
                
                Personnel Budgets for Guard and Reserve

                 ((Constant 1996 dollars in millions))

Reserve component                             1990    1997  Difference
------------------------------------------  ------  ------  ==========
Army National Guard                         $3,992  $3,156      ($836)
Air National Guard                           1,290   1,273        (17)
======================================================================
Total guard                                 $5,282  $4,428      ($854)
Army Reserve                                 2,667   1,989       (678)
Air Force Reserve                              803     755        (48)
Naval Reserve                                1,901   1,352       (549)
Marine Corps Reserve                           381     371        (10)
======================================================================
Total reserve                               $5,752  $4,467    ($1,285)
======================================================================
Total guard and reserve                     $11,03  $8,895    ($2,139)
                                                 4
----------------------------------------------------------------------
Note:  Differences in addition and subtraction are due to rounding. 

Source:  Services' budget estimates. 


--------------------
\3 The other major account groups are operation and maintenance;
procurement; research, development, test, and evaluation; military
construction; and family housing. 

\4 These categories represent direct costs.  Total military personnel
obligations also include reimbursable costs to the services, such as
personnel support provided to depot maintenance activities under the
Defense Business Operations Fund.  Reimbursable costs represent under
1 percent of the military personnel accounts. 

\5 Personnel levels are as of the end of the fiscal year, or end
strength. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :2

Discounting for inflation by using constant 1996 dollars, there has
been a relatively close correlation since 1990 between the decline in
the reserve components' portion of the military personnel accounts
and the reduction in reserve components' personnel.  Specifically,
the National Guard's military personnel accounts are projected to
decline between fiscal years 1990 and 1997 by 16 percent, compared to
a 14-percent personnel reduction.  During the same period, the
reserve's military personnel accounts are projected to decline by 22
percent, or about 3 percent below the rate of decline in the
reserve's force level.  (See app.  II for an overview of the National
Guard's military personnel budget and personnel level changes from
1990 through 1997 and app.  III for a similar overview of the
reserve's budget and personnel.)

About 93 percent of the National Guard's military personnel accounts
for fiscal year 1997 consist of two categories:  individual and unit
training (50 percent) and administration and support (43 percent). 
These two categories account for about 87 percent of reserve military
personnel pay and allowances (49 percent for individual and unit
training and 38 percent for administration and support).  No other
category in either the National Guard's or reserve's personnel
budgets comprises over 5 percent of the total.  The reserve
components' budget categories, in turn, consist of servicemembers'
pay costs, of which the largest element is basic pay.  Basic pay
represents 60 percent of National Guard budget obligations and 57
percent of reserve budget obligations.  Retired pay, basic allowances
for quarters, variable housing allowance, and travel comprise an
additional 22 to 23 percent of the reserve components' total military
personnel costs. 

The cost of each servicemember in fiscal year 1997 is projected to
increase for all reserve components, except the Army National Guard. 
Because Army National Guard costs are projected to decline by over
$300 per person between fiscal years 1990 and 1997, total National
Guard costs per person are projected to decline from about $9,300 in
fiscal year 1990 to about $9,200 in fiscal year 1997, despite a
projected increase of nearly
$650 per person in Air National Guard costs.  Increases in the
reserve's costs range from about $225 per person for the Marine Corps
Reserve to about $1,500 per person for the Naval Reserve.  Overall
Reserve personnel costs per member are projected to increase from
about $9,700 in fiscal year 1990 to about $10,300 in fiscal year
1997. 

There are marked differences in the reserve components' budgets for
several categories.  The Naval Reserve's share of the fiscal year
1997 administration and support budget is twice its share of total
reserve personnel, while the Air Force Reserve has budgeted a minimal
percentage for administration and support in relation to its
personnel level.  The Air Force Reserve has budgeted more for special
training than the other services combined.  The Air National Guard's
fiscal year 1997 special training budget is three times that of the
Army's, even though the Army has over 75 percent of the personnel. 
The Army National Guard has budgeted a much higher percentage for
education benefits than the Air National Guard. 


   DECREASE IN PERSONNEL BUDGET
   CLOSELY FOLLOWS DECREASE IN
   PERSONNEL
------------------------------------------------------------ Letter :3

The reserve components' military personnel budgets, adjusted to 1996
constant dollars, are projected to decrease at about the same rate as
personnel level reductions between fiscal years 1990 and 1997.  As
shown in figure 1, the National Guard's budget is projected to
decrease by
17 percent, from $5.3 billion to $4.4 billion, while personnel levels
are projected to decline by 14 percent, from 554,000 to 475,000.  The
military personnel budget for the reserve, as shown in figure 2, is
projected to decline by 22 percent, from about $5.8 billion to $4.5
billion, while personnel levels are projected to decline by 26
percent, from about 574,000 to about 426,000. 

   Figure 1:  Decline of National
   Guard Personnel Budgets and
   Personnel Levels Between Fiscal
   Years 1990 and 1997

   (See figure in printed
   edition.)

   Figure 2:  Decline of Reserve
   Military Personnel Budgets and
   Personnel Levels Between Fiscal
   Years 1990 and 1997

   (See figure in printed
   edition.)

The reductions in budget and personnel between fiscal years 1990 and
1997 vary for each reserve component.  Figure 3 shows that the Army
National Guard's budget is projected to decrease to a greater extent
than its personnel, whereas the Air National Guard is projected to
have minimal budget reductions but larger personnel reductions.  In
contrast, as shown in figure 4, the reserve components are projected
to have greater personnel decreases than budget decreases.  The
decreases in the Army and the Naval Reserves' budgets and personnel
are projected to be considerably greater than those of the Air Force
and the Marine Corps Reserves. 

   Figure 3:  Reductions in
   National Guard Personnel
   Budgets and Personnel Levels
   Between Fiscal Years 1990 and
   1997

   (See figure in printed
   edition.)

   Figure 4:  Reductions in
   Reserve Military Personnel
   Budgets and Personnel Levels
   Between Fiscal Years 1990 and
   1997

   (See figure in printed
   edition.)


   MILITARY PERSONNEL ACCOUNT
   PRIMARILY COMPRISED OF UNIT AND
   INDIVIDUAL TRAINING AND
   ADMINISTRATION AND SUPPORT
   COSTS
------------------------------------------------------------ Letter :4

The vast majority of the reserve components' military personnel
budgets are comprised of two categories:  unit and individual
training and administration and support.  Much of these two
categories provide for pays and allowances associated with training
activities and for personnel assigned to active duty in support of
the reserve components.\6 Pays and allowances are predominantly
entitlements.  Generally, once servicemembers meet certain criteria
such as years of service or military rank, they are entitled to
certain benefits. 

As shown in figure 5, approximately half of the projected military
personnel costs for fiscal year 1997 are comprised of unit and
individual training, while administration and support absorb most of
the remainder of the respective accounts.  These two budget
categories comprise about 93 percent of the National Guard's military
personnel budget and about 87 percent of the reserve's military
personnel budget.  The proportion of the budget allocated to
administration and support costs is projected to increase between
fiscal years 1990 and 1997.  Administration and support costs were 35
percent of the total personnel budget for the National Guard in
fiscal year 1990, compared to 43 percent estimated for fiscal year
1997, and were about 33 percent of the total personnel budget for the
reserve in fiscal year 1990, compared to 38 percent estimated for
fiscal year 1997.  The proportion of the budget allocated to unit and
individual training is projected to decrease by about 3 percent for
both the National Guard and the reserve. 

   Figure 5:  Allocation of Fiscal
   Year 1997 Military Personnel
   Budget for National Guard and
   Reserve

   (See figure in printed
   edition.)

Viewed differently, basic pay and four other entitlements--which are
incorporated within the National Guard's and the reserve's budget
categories--are projected to comprise about 80 percent of the reserve
components' fiscal year 1997 military personnel budgets.  Basic pay
alone comprises 60 percent of the National Guard budget and 57
percent of the reserve's budget.  (See fig.  6.)

   Figure 6:  Percentage of Fiscal
   Year 1997 Reserve and National
   Guard Budgets Related to Basic
   Pay, Retired Pay Accrual, Basic
   Allowances for Quarters,
   Travel, and Other

   (See figure in printed
   edition.)

Note:  The other category includes clothing, subsistence, separation
benefits, reserve incentives, disability and hospitalization,
education benefits, reserve officer training corps summer camp, other
training and support costs, and reimbursable costs. 


--------------------
\6 Reserve personnel serving on active duty for contingencies and
peace operations are paid through active component military personnel
accounts. 


   PER PERSON COSTS FOR MOST
   COMPONENTS ARE PROJECTED TO
   INCREASE
------------------------------------------------------------ Letter :5

Despite an overall decline in the reserve components' military
personnel budgets and personnel, per person costs are projected to
increase for all components, except the Army National Guard.\7 As
shown in figure 7, the total National Guard budget and per person
costs are declining (due to the projected decline in Army National
Guard costs).  The projected decline in Army National Guard costs per
person is shown in figure 8, as well as the upward trend in Air
National Guard costs per person. 

   Figure 7:  Trend in National
   Guard Total and Per Person
   Budgets

   (See figure in printed
   edition.)

   Figure 8:  Trend in National
   Guard Per Person Budget, by
   Service

   (See figure in printed
   edition.)

The downward trend in the total reserve budget compared to the
increase in total per person costs is shown in figure 9, while the
services' generally rising trends in per person costs are shown in
figure 10. 

   Figure 9:  Trend in Reserve
   Total and Per Person Budgets

   (See figure in printed
   edition.)

   Figure 10:  Trend in Reserve
   Per Person Budget, by Service

   (See figure in printed
   edition.)

As table 3 shows, the per person costs for the Army National Guard
are projected to decrease by $339 from fiscal years 1990 to 1997,
whereas the costs per person for the other components are projected
to increase during the same time period.  The table also shows that
those projected cost increases range from $224 for the Marine Corps
Reserve to $1,475 for the Naval Reserve.  The total projected
increase for the National Guard and the reserve is $256 per person,
or about 2 percent. 



                                Table 3
                
                     Per Person Costs by Component

Reserve component                             1990    1997  Difference
------------------------------------------  ------  ------  ==========
Army National Guard                         $8,822  $8,483      ($339)
Air National Guard                          11,035  11,675         640
======================================================================
Total guard                                 $9,276  $9,206       ($70)
Army Reserve                                 8,499   9,030         530
Air Force Reserve                            9,578  10,285         707
Naval Reserve                               12,409  13,884       1,475
Marine Corps Reserve                         8,664   8,887         224
======================================================================
Total reserve                               $9,671  $10,32        $651
                                                         1
======================================================================
Total guard and reserve                     $9,478  $9,734        $256
----------------------------------------------------------------------
Note:  Rows may not subtract due to rounding. 

Source:  Our analysis based on services' budget estimates. 


--------------------
\7 For per person calculations, we used the average yearly strength
reported by the services in their budget submissions (fiscal year
1990 personnel levels exclude reserve personnel who served on active
duty in support of Operation Desert Shield).  The proportion of
full-time reservists included in the average strength varies by
service, thereby affecting per person costs differently. 


   ADMINISTRATION AND SUPPORT
   CATEGORY ACCOUNTS FOR MOST OF
   THE PER PERSON INCREASE
------------------------------------------------------------ Letter :6

The administration and support budget category is projected to
receive the largest dollar increase for all components from fiscal
years 1990 to 1997.  A comparison of the per person costs by National
Guard component and major budget category for fiscal years 1990 and
1997 is shown in table 4. 



                                Table 4
                
                  Per Person National Guard Personnel
                  Costs by Service and Budget Category

                                            Fiscal
Budget category                               year    Army   Air Force
------------------------------------------  ------  ------  ----------
Unit/individual training                      1990  $4,706      $5,592
                                              1997   4,448       5,228
Administration and support                    1990   3,134       3,784
                                              1997   3,736       4,876
Education benefits                            1990      75         121
                                              1997     106          35
School training                               1990     498         695
                                              1997     126         727
Special training                              1990     393         815
                                              1997      51         582
Reimbursable costs                            1990      15          28
                                              1997      15         228
======================================================================
Total obligations                             1990  $8,822     $11,035
                                              1997  $8,483     $11,675
----------------------------------------------------------------------
Note:  Totals may not add due to rounding. 

Source:  Our analysis based on services' budget estimates. 

The table shows the following for each category. 

  -- Unit/individual training.  The Air Force's costs per person are
     about 18 percent greater than the Army's costs in fiscal years
     1990 and 1997.  Both the Army's and the Air Force's costs are
     projected to decline by about 5 percent from fiscal years 1990
     to 1997.  Air Force budget officials explained that Air Force
     training requirements are intensive; for example, aircrew
     members perform 48 additional flying training periods each year
     for proficiency. 

  -- Administration and support.  The Air Force's costs per person
     are about 21 percent greater that the Army's costs in fiscal
     year 1990 and are projected to increase to about 31 percent
     greater than the Army's in fiscal year 1997.  Costs for both
     services are projected to increase from fiscal years 1990 to
     1997:  the Army's by 19 percent and the Air Force's by 29
     percent.  Army budget officials stated that the Army's projected
     cost increase is due to increases in the student loan program,
     retention bonuses, and the initiation of the transition benefit
     program.\8 Air Force budget officials stated that pay and
     allowances for members on active duty comprise the major portion
     of this category and that these members are projected to
     increase from about 8,640 in fiscal year 1990 to 10,130 in
     fiscal year 1997.  Also, the increase is partially due to
     incentive pays for aircrew members. 

  -- Education benefits.  The Army's costs per person are projected
     to increase by 41 percent, whereas the Air Force's costs are
     projected to decrease by 71 percent from fiscal years 1990 to
     1997.  Army budget officials stated that the DOD Board of
     Actuaries determines the rate per eligible soldier and that the
     actuarial rate and the amortization amount have increased
     substantially since fiscal year 1994.  The amortization payment
     rose from zero to $6.2 million.  Air Force budget officials
     stated that the fiscal year 1997 budget for education benefits
     is understated by about $6 million and, therefore, the per
     person decrease is in error. 

  -- School training.  The Army's costs per person are projected to
     decline by 75 percent, whereas the Air Force's costs are
     projected to increase by 5 percent from fiscal years 1990 to
     1997.  In 1990, the Air Force's costs were about 40 percent
     greater than the Army's; however, in 1997, the Air Force's costs
     are projected to be about 477 percent greater than the Army's. 
     According to Army budget officials, a decrease is projected
     because this is one of two discretionary categories (the other
     being special training), and available funds must be applied to
     statutory requirements such as increases to the GI Bill.  Air
     Force budget officials explained that costs are driven by
     aircraft and mission changes.  For example, the addition of a
     second bomber unit had a major influence on costs for fiscal
     year 1997. 

  -- Special training.  The Army's costs per person are projected to
     decline by 87 percent, whereas the Air Force's costs are
     projected to decline by 29 percent from fiscal years 1990 to
     1997.  Although the Air Force's costs per person were about
     twice that of the Army's in 1990, they are projected to be 11
     times greater than the Army's costs in 1997.  Army budget
     officials stated that costs are projected to decrease because
     this category is discretionary and funds were needed to meet
     statutory requirements. 

  -- Reimbursable costs.  The Army's reimbursable costs are projected
     to remain the same, but the Air Force's costs are projected to
     increase over 700 percent.  Also, in 1990, the Air Force's
     reimbursable costs were about twice as high as the Army's, but
     in 1997 they are estimated to be over
     14 times higher.  According to Air Force budget officials, costs
     have increased because of a substantially larger role in the
     training of foreign military pilots in conjunction with foreign
     military sales programs. 

  -- Total costs.  The Army's costs per person are projected to
     decline by 4 percent, whereas the Air Force's costs are
     projected to increase by 6 percent from fiscal years 1990 to
     1997.  Although the Air Force's per person costs were 25 percent
     greater than the Army's costs in 1990, they are projected to be
     38 percent greater than the Army's in 1997.  Air Force budget
     officials stated that increased costs are due largely to higher
     numbers of full-time personnel.  They further explained that
     budget differences with the Army occur for a variety of reasons,
     chiefly because Air Force training requirements are greater and
     because the Army practices tiered resourcing, whereby units that
     are designated as first to fight receive higher priority for
     resources.  (Tier I receives 100 percent of resource
     requirements whereas tier IV receives 40 percent.) Because of
     mission differences, training, schooling, recurring training,
     travel, and other budgeted costs also differ.  Other variables
     affect the services' budgets as well, such as officer to
     enlisted ratios, the full-time/part-time mix, demographics,
     participation rates, clothing rates, and service initiatives. 

Table 5 compares the per person costs by reserve component and major
budget category for fiscal years 1990 and 1997.  The largest dollar
increase is in the administration and support category. 



                                     Table 5
                     
                      Per Person Reserve Personnel Costs by
                           Service and Budget Category

                                  Fiscal                                  Marine
Budget category                     year    Army  Air Force    Navy        Corps
-----------------------------  ---------  ------  ---------  ------  -----------
Unit/individual training            1990  $4,480     $6,147  $5,366       $5,314
                                    1997   4,573      6,112   5,162        5,149
Administration and support          1990   2,477        616   6,264        2,230
                                    1997   3,381        876   7,841        2,758
Education                           1990      84        142      69          145
                                    1997     115         63      71          235
Senior ROTC/Platoon leader          1990     171        221     132          134
                                    1997     211        274     123          118
Mobilization training               1990     139         26      46           89
                                    1997      36         42      25           62
School training                     1990     404        649      87          218
                                    1997     296        822      60          144
Special training                    1990     394      1,465     311          484
                                    1997     222      1,649     225          338
Junior ROTC                         1990      21         50      25           34
                                    1997      65        147     101           72
Health professions                  1990      65        239     109        N/A\a
                                    1997      80        290     220          N/A
Branch officers                     1990     237        N/A     N/A          N/A
                                    1997      23        N/A     N/A          N/A
Chaplains                           1990       6        N/A     N/A          N/A
                                    1997      10        N/A     N/A          N/A
Reimbursable                        1990      23         23       1           18
                                    1997      17         12      56           12
================================================================================
Total obligations                   1990  $8,499     $9,578  $12,40       $8,664
                                                                  9
                                    1997  $9,030    $10,285  $13,88       $8,887
                                                                  4
--------------------------------------------------------------------------------
Note:  Totals may not add due to rounding. 

\a Not applicable. 

Source:  Our analysis based on services' budget estimates. 

The table shows the following for each category. 

  -- Unit/individual training.  The change in the individual
     services' per person costs is projected to vary by about 5
     percent or less from fiscal years 1990 to 1997.  The Air Force's
     1997 estimated costs are about 34 percent greater than the
     Army's estimate and about 18 percent greater than the Navy's and
     the Marine Corps' estimates.  Air Force budget officials stated
     that costs are affected by (1) the percentage of personnel in
     different training categories and (2) the officer/enlisted mix
     and grade structure.  Moreover, the Air Force Reserve may have a
     higher percentage of officers and a higher grade structure,
     which would result in higher costs. 

  -- Administration/support.  Individual service increases are
     projected to range from 24 percent for the Marine Corps to 42
     percent for the Air Force between fiscal years 1990 and 1997. 
     However, the Air Force has the lowest per person costs, and the
     Navy has the highest.  The Navy's cost estimate for fiscal year
     1997 is about eight times higher than the Air Force's and is
     more than twice as high as the Army's.  According to Navy budget
     officials, training administration and support personnel
     constitute about 15 to 17 percent of the Naval Reserve end
     strength.  The cost increase stems from the aggregate of pay
     increases for such personnel.  Further, differences among the
     services in the number, type, and funding source of full-time
     personnel result in the Navy's costs being higher than the other
     services' costs (along with the Naval Reserve, including a large
     portion of contributory support travel in this budget category). 
     According to Air Force officials, the projected increase for the
     Air Force is due in part to increases in reserve incentives, the
     health professions training program,\9 and the involuntary
     separation pay program.  They stated that Air Force costs are
     lower possibly because of fewer full-time personnel or because
     of differences among the services in categorizing administrative
     and support costs.  Marine Corps budget officials stated that
     costs are projected to increase due to pay raises and increases
     in related categories. 

  -- Education benefits.  The Air Force projects a 56-percent
     reduction in education benefits, whereas the other services
     project increases.  The Marine Corps and the Army estimate
     increases of 62 percent and 37 percent, respectively, but the
     Marine Corps has budgeted twice as much per person as the Army
     and over three times as much as the other two services.  The
     Navy has projected a slight increase.  Marine Corps budget
     officials explained that the Marine Corps has a higher rate of
     servicemembers taking advantage of educational benefits. 
     Because this level of participation was not estimated in earlier
     years, the DOD Board of Actuaries directed amortization payments
     to bring the Marine Corps' portion into balance.  Air Force
     officials said the Air Force's decrease is due to lowering the
     actuaries' rate from $546 in fiscal year 1990 to $192 in fiscal
     year 1997, as well as to fluctuations in enlistments,
     reenlistments, and extensions.  Army budget officials explained
     that changes in the law increased participation rates and
     allowances and resulted in higher costs.  For example, under the
     Fiscal Year 1996 Defense Authorization Act, the Reserve
     Component Montgomery GI Bill educational assistance allowance
     provides up to a 284-percent increase in the monthly allowance
     for critical skills or specialties. 

  -- Senior ROTC and Marine Corps Platoon Leaders Class.  Air Force
     and Army increases are similar, at 24 and 23 percent,
     respectively.  However, in fiscal year 1997, the Air Force has
     budgeted about 30 percent more than the Army and over twice as
     much as the Navy and the Marine Corps.  According to Army and
     Air Force budget officials, costs are projected to rise due to
     an increase in the monthly stipend rate, from $100 to $150.  Air
     Force officials pointed out that the number of students may vary
     among the services and that the number of Air Force students
     have decreased.  Army officials said that a decrease in summer
     training sites resulted in increased travel costs. 

  -- Mobilization training.  Mobilization training costs have
     fluctuated since fiscal year 1990.  The Army's costs were
     highest in fiscal year 1990, but they are projected to be second
     lowest in fiscal year 1997.  In fiscal year 1997, the Navy's
     costs are projected to be the lowest, and all services but the
     Air Force estimate decreases ranging from the Marine Corp's 29
     percent to the Army's 74 percent.  The Marine Corps' cost per
     person for fiscal year 1997 is about 48 percent higher than the
     Air Force's.  Army budget officials explained that budget cuts
     have led to the tiered resourcing whereby units that are
     designated as first to fight receive higher priority for
     resources.  Air Force officials said that increases in the
     health professions training program affected mobilization
     training costs, as well as administration and support costs,
     because participants are required to undergo mobilization
     training.  According to Navy officials, the Navy's costs are
     projected to decrease because of shifting priorities and
     declining end strength, particularly among individuals in the
     Ready Reserve and Voluntary Training Units. 

  -- School training.  The Air Force had the highest per person costs
     in fiscal years 1990 and 1997, and it is the only service to
     project an increase, about 27 percent.  The other services
     estimate reductions between 27 percent and 34 percent.  In
     fiscal year 1990, the Air Force's costs were about 61 percent
     higher than the next highest, the Army's, and in fiscal year
     1997, its costs are projected to be about 178 percent higher
     than the Army's.  The Navy had the lowest costs in both years,
     about 93 percent lower than the Air Force's costs in fiscal year
     1997.  Air Force officials cited the need to train personnel in
     operating and maintaining Air Force weapon systems as a likely
     reason for costs that are higher than the other services.  Also,
     according to the officials, the Air Force's projected cost
     increase is due to an increase in officer training days and a
     decrease in enlisted training days.  Specifically, there were
     significant costs increases in officer training school,
     undergraduate pilot/navigator training, unit conversion
     training, and initial skills acquisition training.  According to
     Navy budget officials, resources have been prioritized to
     provide maximum support to the active forces. 

  -- Special training.  The Air Force's costs in fiscal year 1997 are
     projected to be over seven times higher than the Army's and the
     Navy's and almost five times higher than the Marine Corps'.  The
     Air Force was the only service to project a cost increase
     between fiscal years 1990 and 1997, which amounts to 12 percent
     per person.  The other services have projected decreases ranging
     from the Navy's 28 percent to the Army's 44 percent.  Army
     budget officials stated that budget constraints required a
     decrease in the special training category, including tours of
     duty in support of exercises, operational training, command and
     staff support, and recruiting and retention support. 

  -- Junior ROTC.  All services estimate higher costs of between two
     to four times the fiscal year 1990 level.  The Air Force had the
     highest costs in fiscal year 1990, and it is projected to have
     the highest costs in fiscal year 1997, about 46 percent higher
     than the Navy and over 100 percent higher than the Army and the
     Marine Corps.  Army budget officials stated that under
     congressional direction, the number of units rose from 865 to
     1,380 since fiscal year 1990, and the number of students
     increased from about 130,700 to about 206,100.  Air Force
     officials stated that Air Force costs rose due to (1) an
     increase in the number of students from about 45,000 in fiscal
     year 1990 to about 81,000 projected for fiscal year 1997, (2) a
     near doubling in the number of detachments to over 600, and (3)
     cadets' travel to Air Force locations.  Navy officials said that
     the Navy's program also has expanded, with the number of
     students increasing from about 29,500 to a projected 55,500 and
     that the annual inflation applied to uniform costs totaled over
     17 percent.  Marine Corps units are projected to increase from
     80 to almost 175. 

  -- Health Professions Scholarships.  Although the Air Force had the
     highest costs per person in fiscal year 1990, and they are
     projected to remain the highest in fiscal year 1997, the Navy's
     costs are projected to more than double.  Navy budget officials
     explained that the program has expanded and that such
     programmatic increases, along with over a 20-percent increase in
     annual pay raises provided in student stipends, resulted in the
     projected cost increase.  The Army and the Air Force estimate
     increases of 24 and 22 percent, respectively.  For fiscal year
     1997, Air Force costs are projected to be about 32 percent
     higher than the Navy's and over three times higher than the
     Army's.  Army budget officials stated that the number of
     students in the program decreased by 110, but stipend, clothing,
     pay, and travel rates increased.  According to Air Force
     officials, the number of Air Force students might be higher than
     other services, and the addition of a financial assistance
     program grant in fiscal year 1991 contributed to higher costs. 

  -- Branch Officers Basic Course.  Army costs are projected to
     decrease by 90 percent because budget constraints have required
     limiting the course to those who have a relevant unit of
     assignment, according to Army budget officials.  Army officials
     explained that formerly, all newly commissioned officers
     attended the course regardless of their future participation in
     the Army Reserve (e.g., nonscholarship officers without a
     follow-on unit and officers entering branches that were not in
     the Army Reserve). 

  -- Chaplain candidates.  Army costs are projected to increase by
     about 67 percent.  Army budget officials explained that the
     estimated number of chaplains has increased by 32 percent since
     fiscal year 1990.  Further, the average number of days that
     chaplain candidates serve on active duty for training has
     increased to meet new training requirements, and the training
     often takes place in high-cost areas. 

  -- Reimbursable costs.  Costs are projected to decrease in all
     services except the Navy, which had virtually no costs in fiscal
     year 1990 but about three to four times the cost of the other
     services in fiscal year 1997.  According to Navy budget
     officials, the costs resulted from transferring about 1,500
     reservists into the Defense Business Operations Fund system,
     which is scheduled to end in fiscal year 1998. 

  -- Total per person costs.  The Navy has the highest and the Marine
     Corps the lowest per person costs.  Total per person costs are
     projected to increase for all the services, with the Navy having
     the largest increase since fiscal year 1990, about 12 percent,
     and the Marine Corps having the smallest, about 3 percent.  The
     Navy's personnel costs, at about $13,900 per servicemember, are
     projected to be about 35 percent more than the Air Force's,
     which is next highest, about 54 percent more than the Army's,
     and about 56 percent more than the Marine Corps'.  Army budget
     officials stated that different decisions have been made for
     each category based on the number of its population, criticality
     of the population to the mission, and availability of funds. 
     Additionally, each category has its own set of "cost drivers."
     One major reason for the overall increase is separation
     benefits, which did not exist in fiscal year 1990 but represent
     over 2 percent of the fiscal year 1997 budget.  Air Force budget
     officials explained that fluctuations in military personnel
     costs are expected due to officer/enlisted mix changes, grade
     structure changes, and changes in training requirements driven
     by weapon system and support changes.  According to Navy
     officials, the Naval Reserve is a more senior force than the
     Army and the Marine Corps Reserves, and there is a large
     disparity with the Air Force in terms of full-time support
     personnel levels and funding.  Consequently, the Naval Reserve
     has a higher overall cost. 


--------------------
\8 Full-time support personnel are authorized to receive the same
transition enhancements and initiatives as active personnel.  These
benefits include special separation benefit, voluntary separation
incentive, temporary early retirement authority, reserve involuntary
separation pay, and reserve special separation pay. 

\9 The program provides financial assistance to students undertaking
training as physicians or in other medical-related fields. 


   PER PERSON COSTS FOR BASIC PAY
   AND ALLOWANCES DIFFER
------------------------------------------------------------ Letter :7

Basic pay and four allowances imbedded within reserve and National
Guard budget categories comprise about 82 percent of the National
Guard's military personnel budget and about 80 percent of the
reserve's budget.  The National Guard's and the reserve's costs for
basic pay, retired pay accrual, basic allowances for quarters,
variable housing allowance, travel, and other costs for fiscal years
1990 and 1997 are shown in tables 6 and 7. 



                                Table 6
                
                  Per Person National Guard Personnel
                  Costs by Service and Budget Category

                                                          Army     Air
                                                        Nation  Nation
                                                Fiscal      al      al
Budget category                                   year   Guard   Guard
----------------------------------------------  ------  ------  ------
Basic pay                                         1990  $5,244  $6,620
                                                  1997   5,105   7,098
Retired pay accrual                               1990   1,158   1,456
                                                  1997     919   1,274
Basic allowances for quarters                     1990     646     727
                                                  1997     584     857
Variable housing allowance                        1990      74     112
                                                  1997      92     175
Travel                                            1990     393     563
                                                  1997     209     488
Other                                             1990   1,307   1,557
                                                  1997   1,574   1,783
======================================================================
Total                                             1990  $8,822  $11,03
                                                                     5
                                                  1997  $8,483  $11,67
                                                                     5
----------------------------------------------------------------------
Note:  Totals may not add due to rounding. 

Source:  Our analysis based on services' budget estimates. 

Table 6 shows the following for each category. 

  -- Basic pay.  The Army's costs per person are projected to
     decrease by about 3 percent, while Air Force costs are projected
     to increase by 7 percent.  The Air Force's estimate is about 39
     percent higher than the Army's for fiscal year 1997, compared to
     26 percent higher in fiscal year 1990.  According to Air Force
     budget officials, a 1,500-person increase in the number of
     full-time personnel since fiscal year 1990 accounts for the cost
     increase. 

  -- Retired pay accrual.  The Army estimates a decrease of about 21
     percent from fiscal years 1990 to 1997, and the Air Force
     estimates a decrease of about 13 percent.  The Air Force's costs
     were about 26 percent higher than the Army's in fiscal year
     1990, and they are projected to be about 39 percent higher for
     fiscal year 1997.  Air Force budget officials said that the cost
     increase stems from the increased number of full-time personnel. 

  -- Basic allowances for quarters.  The Army projects a 10-percent
     decrease for fiscal year 1997, but the Air Force projects an
     18-percent increase.  The Air Force's estimate is about 47
     percent higher than the Army's for fiscal year 1997.  Air Force
     budget officials stated that increased costs are related to an
     increase in full-time Air National Guard personnel as a
     percentage of the total force. 

  -- Variable housing allowance.  Both services project increases for
     fiscal year 1997, the Army by 23 percent and the Air Force by 56
     percent.  The Air Force's estimate for fiscal year 1997 is 90
     percent higher than the Army's, compared to fiscal year 1990
     when the Air Force's costs were 51 percent higher.  Army budget
     officials stated that the proportion of officers to enlisted
     personnel entitled to the allowance has increased, as well as
     the average grade of the officers, thereby resulting in
     increased costs.  Air Force budget officials stated that
     increased costs are related to an increase in Air National Guard
     full-time personnel as a percentage of the total force. 

  -- Travel.  Both services project decreases for fiscal year 1997,
     the Army by 47 percent and the Air Force by 13 percent.  The Air
     Force's estimated costs per person are over twice the Army's. 
     Army budget officials stated that costs are projected to
     decrease as a result of congressional intent, DOD directive, and
     the force reduction.  According to Air Force budget officials,
     travel costs are related to training requirements and pilot
     training and exercises require travel costs. 

  -- Other.  Remaining costs are projected to increase by about 21
     percent for the Army and about 15 percent for the Air Force. 



                                     Table 7
                     
                      Per Person Reserve Personnel Costs by
                           Service and Budget Category

                                  Fiscal                                  Marine
Budget category                     year    Army  Air Force    Navy        Corps
-----------------------------  ---------  ------  ---------  ------  -----------
Basic pay                           1990  $4,880     $5,754  $6,779       $4,923
                                    1997   5,238      5,946   7,528        5,281
Retired pay accrual                 1990   1,014        848   1,846        1,002
                                    1997     874        639   1,621          849
Basic allowances for quarters       1990     403        370     735          464
                                    1997     366        485     909          564
Variable housing allowance          1990      61         12     216          105
                                    1997      78         20     266           94
Travel                              1990     641      1,093   1,107          707
                                    1997     434      1,285   1,200          595
Other                               1990   1,501      1,501   1,727        1,461
                                    1997   2,039      1,911   2,360        1,506
================================================================================
Total                               1990  $8,499     $9,578  $12,40       $8,664
                                                                  9
                                    1997  $9,030    $10,285  $13,88       $8,887
                                                                  4
--------------------------------------------------------------------------------
Note:  Totals may not add due to rounding. 

Source:  Our analysis based on services' budget estimates. 

Table 7 shows the following for each category. 

  -- Basic pay.  Projected increases per person range from 3 percent
     for the Air Force to 11 percent for the Navy.  The Navy's
     estimate is about (1) 27 percent more than the Air Force's,
     which is next highest; (2) 43 percent higher than the Marine
     Corps'; and (3) about 44 percent higher than the Army's, which
     is projected to have the lowest.  The Navy also had the highest
     cost in fiscal year 1990.  Navy budget officials explained that
     the difference in per person costs among the services is due to
     their respective grade mixes and numbers and types of full-time
     support personnel.  Specifically, the Naval Reserve is
     predominantly grade E-5 and above, and full-time support
     personnel, in particular, are above E-4 and O-3.  Civilian
     support is minimal in the Naval Reserve but is prevalent in the
     Air Force Reserve as full-time technicians (who are also
     reservists).  Such civilian support is funded from operation and
     maintenance accounts rather than military personnel accounts. 
     Consequently, cost comparisons among the services are rendered
     difficult because the personnel requirements and sources are so
     different. 

  -- Retired pay accrual.  The services' estimated decreases range
     from 12 percent for the Navy to 25 percent for the Air Force. 
     The Navy's per person costs are projected to be 85 percent
     higher than the Army's, 91 percent higher than the Marine
     Corps', and about 154 percent higher than the Air Force's.  The
     Navy also had the highest cost in fiscal year 1990.  Navy budget
     officials stated that the Naval Reserve has large numbers of
     higher-graded career personnel who require larger retired pay
     accruals than do the more junior personnel in the Army and the
     Marine Corps.  Also, many full-time support personnel in the Air
     Force are civilian; thus, they are not paid through the military
     personnel account and do not require the accrual. 

  -- Basic allowances for quarters.  Only the Army estimates a
     decrease (9 percent).  The other services project increases of
     22 to 31 percent.  The Navy is projected to have the highest per
     person cost in fiscal year 1997, which is 61 to 148 percent
     higher than the other services' estimates.  The Navy also had
     the highest cost in fiscal year 1990.  Air Force budget
     officials stated that the percentage of personnel in different
     training categories and the officer/enlisted grade mix and grade
     structure affect costs.  Further, the Air Force may have a
     higher percentage of officers as well as a higher grade
     structure compared to the other services.  Marine Corps budget
     officials stated that costs have been affected by an increased
     number of active reserves, the grade structure, and pay
     increases. 

  -- Variable housing allowance.  The Marine Corps is projected to
     have about an 11-percent decrease between fiscal years 1990 and
     1997, but the other services project increases of 23 percent for
     the Navy, 28 percent for the Army, and 71 percent for the Air
     Force.  Although the Air Force is estimated to have the largest
     percentage increase, it has the least cost per person of the
     four services.  Specifically, the Navy's costs are projected to
     be 13 times higher than the Air Force's, over 3 times higher
     than the Army's, and over twice as high as the Marine Corps'. 
     Army budget officials stated that the number of personnel
     qualified to receive the allowance has increased.  Air Force
     officials stated that total variable housing costs are
     relatively low ($1 million in fiscal year 1990 and $1.5 million
     projected for fiscal year 1997) and that small dollar changes
     can reflect large percentage changes.  According to Navy
     officials, the Naval Reserve's costs are attributable to rate
     increases and a more senior force, particularly full-time
     support personnel.  They added that Army and Marine Corps
     support personnel are more junior and more likely to have
     government quarters available and that many Air Force support
     personnel are civilian. 

  -- Travel.  The Air Force and the Navy are projected to have higher
     costs in fiscal year 1997.  The Air Force, with about an
     8-percent increase, and the Navy, with an 8-percent increase,
     are estimated to have twice the cost of the next highest--the
     Marine Corps--and almost three times the cost of the Army.  The
     Army's and the Marine Corps' budgets project decreases of 32 and
     16 percent, respectively.  Air Force officials stated that
     changes in travel costs are most likely due to a change in the
     location for school and special training.  The Navy is
     projecting an increase because of a growing role in contributory
     support to the active component.  According to the budget
     officials, as the reserve with its more senior force has
     increasingly participated in exercises, contingencies, and
     contributory support, travel outside the continental United
     States has risen proportionally.  Such travel increased over
     threefold between fiscal years 1993 and 1996.  Also, active
     naval units worldwide have reserve personnel on annual training
     and special training throughout the year.  Consequently, Naval
     Reserve costs are two to three times higher than the other
     services. 

  -- Other.  Remaining personnel costs are projected to increase. 
     The Army's, the Air Force's, and the Navy's costs are projected
     to rise between 27 and 37 percent, but the Marine Corps'
     increase is slight. 


   SOME COMPONENTS' BUDGET
   CATEGORIES ARE DISPROPORTIONATE
   WITH PERSONNEL LEVELS
------------------------------------------------------------ Letter :8

In a number of categories, the services' budgets do not reflect their
respective shares of personnel levels.  For example, the Naval
Reserve has 45 percent of the $1.7 billion estimated fiscal year 1997
budget for administration and support, but its share of the personnel
level is under 23 percent.  However, the Navy plans to allocate only
37 percent of its budget to unit and individual training, while the
other services plan to allocate between 50 and 60 percent of their
budgets for training.  In contrast, the Air Force's budget comprises
less than 4 percent, and the Marine Corps budgets less than 7
percent, of the total administration and support budget. 

The Air Force Reserve, with 17 percent of the reserve personnel,
projects that it will spend 59 percent of the $206 million special
training category in fiscal year 1997.  Special training includes
activities such as command and staff supervision, competitive events,
exercises, management support, operational training, and service and
mission support.  Similarly, the Air National Guard projects a
77-percent share of the $83 million special training category in
fiscal year 1997, although the Army National Guard has 77 percent of
the personnel level.  And, the Army National Guard projects over a
90-percent share of the $43 million education benefits category. 

There are also differences among the services in the pay, allowances,
and travel categories.  With about 23 percent of the fiscal year 1997
reserve personnel level, the Naval Reserve has an estimated
54-percent share of the variable housing budget, about a 35-percent
share of the travel budget, a 39-percent share of the basic
allowances for quarters, a 37-percent share of the retired pay
accrual, and a 29-percent share of basic pay. 

The Air National Guard has a disproportionate share of the total
National Guard budget for pay, allowances, and travel projected for
fiscal year 1997.  With 23 percent of the personnel level, the Air
National Guard comprises about 41 percent of the travel category,
about 36 percent of the variable housing allowance, 30 percent of
basic allowances for quarters, and about 29 percent of basic pay and
retired pay accrual. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :9

We have incorporated informal comments on a draft of this report from
DOD, National Guard, and reserve officials, where appropriate. 


   SCOPE AND METHODOLOGY
----------------------------------------------------------- Letter :10

To identify budget trends and differences in costs among the
services, we analyzed each service's annual military personnel budget
estimate submission to the Congress.  For fiscal years 1990 through
1995, we used actual costs.  For fiscal years 1996 and 1997, we used
estimated costs.  We adjusted the nominal dollars to constant fiscal
year 1996 dollars using 1996 DOD inflation factors for military
personnel costs.  We did not analyze or verify the services'
assumptions supporting the estimates, nor did we verify the accuracy
of the data presented in their budget estimate submissions.  We asked
National Guard and reserve officials to explain some of the trends
and differences among the services and incorporated the explanations
that we considered relevant.  We did not verify the services'
explanations.  We conducted our work from October 1995 to July 1996
in accordance with generally accepted government auditing standards. 


--------------------------------------------------------- Letter :10.1

We are providing copies of this report to appropriate congressional
committees; the Secretaries of Defense, the Air Force, the Army, and
the Navy; the National Guard Directors; the Reserve Chiefs; and the
Director, Office of Management and Budget.  We will also provide
copies to other interested parties upon request. 

If you have any questions concerning this report, please call me on
(202) 512-3504.  Major contributors to this report were Robert
Pelletier and Richard McGeary. 

Sincerely yours,

Richard Davis
Director, National Security
 Analysis


RESERVE COMPONENT MILITARY
PERSONNEL BUDGET CATEGORIES
=========================================================== Appendix I

The following budget categories apply to all services, except where
parentheses specify the applicable services.  National Guard budget
categories are similar to the Army and the Air Force Reserve budget
categories, but exclude Reserve Officers' Training Corps (ROTC),
Junior ROTC, Health Professions Scholarship Program, Chaplain
Candidates, and Branch Officers Basic Course. 

Unit and individual training

  -- Pay group A (assigned to reserve unit for annual training and
     inactive duty training)

active duty training/annual training

inactive duty training

subsistence

clothing

travel

  -- Pay group F (initial active duty training for non-prior service
     enlistees)

pay and allowances/active duty training

clothing

subsistence

travel

  -- Pay group P (inactive duty for training while awaiting initial
     active duty for training) (Army, Navy, and Marine Corps)

inactive duty training

clothing (Marine Corps)

subsistence

  -- Pay group B (inactive duty training and annual training for
     individual mobilization augmentees)

annual training/active duty training

inactive duty training (Army and Air Force)

subsistence

clothing (Navy, Air Force, and Marine Corps)

travel

Administration and support

  -- Active duty pay and allowances

  -- Subsistence (Army and Navy)

  -- Individual uniform gratuities/clothing (Army, Air Force, and
     Marine Corps)

  -- Continental United States cost-of-living allowance (Army and
     Navy)

  -- Travel

  -- Child adoption expenses (Army and Navy)

  -- Separation/transition benefits

  -- Death gratuities

  -- Disability/hospitalization

  -- Reserve incentives

  -- Health profession stipend (Air Force)

  -- Naval ROTC nuclear bonus (Navy)

  -- Active duty for special work (Navy)

Education benefits

  -- Amortization payment/benefits accrual

  -- Officer/enlisted (Army)

  -- Reenlistment (Army)

Senior ROTC (Army, Navy, and Air Force)

  -- Nonscholarship program

subsistence

travel

uniforms issue-in-kind

uniforms (commutation)

summer camp training (pay and allowances)

  -- Scholarship program

subsistence

travel

uniforms issue-in-kind

uniforms/commutation

summer camp training/pay and allowances

Platoon leaders class (Marine Corps)

  -- Uniforms issue-in-kind

  -- Summer camp training

  -- Subsistence allowance, subsidy

  -- Subsistence of enlisted personnel

  -- Travel

Other training and support

  -- Mobilization training

operational training/readiness training (Army and Air Force)

exercises (Army)

service mission/mission support (Army and Air Force)

career development/career enhancement (Army and Air Force)

management support (Army)

individual ready reserve screening/muster/training (Army, Navy, and
Air Force)

competitive events (Army)

health profession training (Air Force)

annual training/active duty training (Navy and Marine Corps)

clothing (Navy)

subsistence of enlisted personnel (Navy and Marine Corps)

travel (Navy and Marine Corps)

merchant marine training (Navy)

  -- School training

career development

initial skill acquisition

officer candidate school/officer training school (Army and Air Force)

prior service training (Army)

refresher/proficiency

undergraduate pilot/navigator (Army and Air Force)

recruiter (Air Force)

unit conversion (Navy, Air Force, and Marine Corps)

continuing medical education (Navy)

individual ready reserve training (Marine Corps)

  -- Special training

command/staff support or supervision (Army, Air Force, and Marine
Corps)

competitive events

exercises

management support

operational training

recruiting

service mission/mission support

retention

environmental compliance (Army)

unit conversion (Navy and Air Force)

drug interdiction activity (Air Force)

conferences and visits (Navy)

additional/extended active duty training (Navy)

  -- Branch officers basic course (Army)

active duty training

uniform allowance

travel

  -- Health professions scholarship program (Army, Navy, and Air
     Force)

pay and allowances/active duty training

initial clothing allowance/uniform allowance

additional clothing allowance

stipend

travel

financial assistance program pay and allowances

financial assistance program stipend

financial assistance program travel

nurse candidate bonus (Navy)

  -- Junior ROTC

uniforms, issue-in-kind

subsistence (Army)

transportation/billeting, travel (Army and Air Force)

  -- Chaplain candidate program (Army)

pay and allowances

uniform allowance

travel


SERVICES' SHARE OF NATIONAL GUARD
PERSONNEL BUDGET, FISCAL YEARS
1990-97
========================================================== Appendix II

                                                                        (Dollars and personnel in millions and
                                                                                  shares in percent)



Budget Category  Service    Share  Amount   Share  Amount   Share  Amount   Share  Amount   Share    Amount   Share    Amount   Share    Amount   Share    Amount  Change    Percent
---------------  --------  ------  ------  ------  ------  ------  ------  ------  ------  ------  --------  ------  --------  ------  --------  ------  --------  ------  ---------
Unit/            Army        76.5  $2,129    75.4  $1,886    75.1  $1,924    74.1  $1,780    74.5    $1,815    74.3    $1,741    74.1    $1,682    74.4    $1,655  ($475)      -22.3
 individual
 training
                 Air         23.5     654    24.6     617    24.9     639    25.9     624    25.5       621    25.7       601    25.9       589    25.6       570    (84)      -12.8
                  Force
====================================================================================================================================================================================
                 Total      100.0  $2,783   100.0  $2,503   100.0  $2,563   100.0  $2,403   100.0    $2,436   100.0    $2,343   100.0    $2,270   100.0    $2,225  ($558)      -20.1

Administration               76.2  $1,418    75.0  $1,366    75.1  $1,425    74.7  $1,395    73.9    $1,423    73.3    $1,413    72.6    $1,379    72.3    $1,390   ($28)       -2.0
 and support      Army
                 Air         23.8     442    25.0     455    24.9     472    25.3     473    26.1       502    26.7       515    27.4       520    27.7       532      89       20.2
                  Force
====================================================================================================================================================================================
                 Total      100.0  $1,860   100.0  $1,821   100.0  $1,896   100.0  $1,869   100.0    $1,925   100.0    $1,927   100.0    $1,899   100.0    $1,921     $61        3.3

Education        Army        70.7     $34    74.9     $36     0.0      $0     0.0      $0    92.0       $13    90.4       $16    89.3       $33    91.2       $39      $5       15.6
 benefits
                 Air         29.3      14    25.1      12   100.0       7   100.0       2     8.0         1     9.6         2    10.7         4     8.8         4    (10)      -73.2
                  Force
====================================================================================================================================================================================
                 Total      100.0     $48   100.0     $48   100.0      $7   100.0      $2   100.0       $14   100.0       $18   100.0       $37   100.0       $43    ($5)      -10.4

School training  Army        73.5    $225    72.6    $243    67.9    $229    71.3    $208    68.5      $179    66.4      $168    59.7      $118    37.3       $47  ($178)      -79.1
                 Air         26.5      81    27.4      92    32.1     108    28.7      84    31.5        82    33.6        85    40.3        80    62.7        79     (2)       -2.6
                  Force
====================================================================================================================================================================================
                 Total      100.0    $307   100.0    $335   100.0    $337   100.0    $292   100.0      $261   100.0      $253   100.0      $197   100.0      $126  ($180)      -58.8

Special          Army        65.1    $178    72.0    $250    70.0    $233    66.4    $243    64.3      $193    65.1      $195    32.0       $32    23.2       $19  ($159)      -89.2
 training
                 Air         34.9      95    28.0      97    30.0     100    33.6     123    35.7       107    34.9       104    68.0        68    76.8        63    (32)      -33.4
                  Force
====================================================================================================================================================================================
                 Total      100.0    $273   100.0    $348   100.0    $333   100.0    $365   100.0      $300   100.0      $299   100.0       $99   100.0       $83  ($191)      -69.8

====================================================================================================================================================================================
Total direct                       $5,272          $5,054          $5,137          $4,932            $4,936            $4,839            $4,502            $4,398  ($874)      -16.6
 program

Reimbursable     Army        67.9      $7    55.3      $7    61.3      $6    60.0      $6    46.7        $6    41.3        $6    30.0        $6    18.2        $6    ($1)      -19.7
 costs
                 Air         32.1       3    44.7       5    38.7       4    40.0       4    53.3         7    58.7         8    70.0        13    81.8        25      22      661.6
                  Force
====================================================================================================================================================================================
                 Total      100.0     $10   100.0     $12   100.0     $10   100.0     $10   100.0       $13   100.0       $14   100.0       $19   100.0       $30     $20      199.3

Total            Army        75.6  $3,992    74.8  $3,788    74.2  $3,817    73.5  $3,633    73.3    $3,629    72.9    $3,539    71.8    $3,248    71.3    $3,156  ($836)      -20.9
 obligations
                 Air         24.4   1,290    25.2   1,278    25.8   1,330    26.5   1,309    26.7     1,320    27.1     1,315    28.2     1,273    28.7     1,273    (17)       -1.4
                  Force
====================================================================================================================================================================================
                 Total      100.0  $5,282   100.0  $5,066   100.0  $5,147   100.0  $4,942   100.0    $4,949   100.0    $4,853   100.0    $4,521   100.0    $4,428  ($853)      -16.2
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note:  Some columns do not add because of rounding. 

                                                                        (Dollars and personnel in millions and
                                                                                  shares in percent)



                                   Person          Person          Person          Person          Personne          Personne          Personne          Personne
Personnel level  Service    Share     nel   Share     nel   Share     nel   Share     nel   Share         l   Share         l   Share         l   Share         l  Change    Percent
---------------  --------  ------  ------  ------  ------  ------  ------  ------  ------  ------  --------  ------  --------  ------  --------  ------  --------  ------  ---------
End strength     Army        78.9  0.4370    79.0  0.4413    78.1  0.4258    77.8  0.4099    77.7    0.3969    77.3    0.3749    76.8    0.3730    77.3    0.3668  (0.070      -16.1
                                                                                                                                                                       2)
                 Air         21.1  0.1170    21.0  0.1176    21.9  0.1191    22.2  0.1172    22.3    0.1136    22.7    0.1098    23.2    0.1127    22.7    0.1080  (0.009       -7.7
                  Force                                                                                                                                                0)
====================================================================================================================================================================================
                 Total      100.0  0.5540   100.0  0.5589   100.0  0.5449   100.0  0.5271   100.0    0.5105   100.0    0.4847   100.0    0.4857   100.0    0.4748  (0.079      -14.3
                                                                                                                                                                       2)

Average          Army        79.5  0.4525    79.1  0.4440    78.7  0.4373    77.7  0.4116    77.9    0.4040    77.6    0.3851    77.2    0.3741    77.3    0.3720  (0.080      -17.8
 strength                                                                                                                                                              5)
                 Air         20.5  0.1169    20.9  0.1170    21.3  0.1182    22.3  0.1179    22.1    0.1149    22.4    0.1114    22.8    0.1104    22.7    0.1090  (0.007       -6.8
                                                                                                                                                                       9)
====================================================================================================================================================================================
                 Total      100.0  0.5694   100.0  0.5610   100.0  0.5555   100.0  0.5295   100.0    0.5189   100.0    0.4965   100.0    0.4845   100.0    0.4810  (0.088      -15.5
                                                                                                                                                                       4)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note:  Some columns do not add because of rounding. 


SERVICES' SHARE OF RESERVE
PERSONNEL BUDGET, FISCAL YEARS
1990-97
========================================================= Appendix III

                                                                        (Dollars and personnel in millions and
                                                                                  shares in percent)



Budget Category  Service    Share  Amount   Share  Amount   Share  Amount   Share  Amount   Share    Amount   Share    Amount   Share    Amount   Share    Amount  Change    Percent
---------------  --------  ------  ------  ------  ------  ------  ------  ------  ------  ------  --------  ------  --------  ------  --------  ------  --------  ------  ---------
Unit/            Army        47.2  $1,406    47.4  $1,222    48.0  $1,364    47.7  $1,259    46.6    $1,179    48.0    $1,108    47.2    $1,066    46.4    $1,007  ($398)      -28.3
 individual
 training
                 Navy        27.6     822    29.2     753    26.8     763    26.5     700    26.1       661    22.7       523    23.1       522    23.1       503   (319)      -38.8
                 Air         17.3     515    16.6     428    17.4     495    17.9     474    19.3       487    20.7       477    20.6       465    20.6       449    (67)      -12.9
                  Force
                 Marines      7.9     234     6.8     175     7.8     222     7.8     206     7.9       201     8.6       198     9.2       207     9.9       215    (19)       -8.2
====================================================================================================================================================================================
                 Total      100.0  $2,977   100.0  $2,578   100.0  $2,843   100.0  $2,639   100.0    $2,528   100.0    $2,307   100.0    $2,259   100.0    $2,173  ($803)      -27.0

Administration   Army        41.2    $777    40.4    $781    39.7    $795    40.3    $760    42.5      $797    44.5      $795    45.9      $801    44.1      $745   ($32)       -4.2
 and
support          Navy        50.9     960    51.2     991    52.1   1,042    51.2     966    49.0       919    46.3       829    44.3       774    45.2       764   (196)      -20.4
                 Air          2.7      52     2.9      56     2.9      57     2.9      55     3.0        56     3.2        58     3.5        61     3.8        64      13       24.5
                  Force
                 Marines      5.2      98     5.5     107     5.4     108     5.5     105     5.5       104     5.9       106     6.3       111     6.8       115      17       17.3
====================================================================================================================================================================================
                 Total      100.0  $1,887   100.0  $1,935   100.0  $2,002   100.0  $1,886   100.0    $1,875   100.0    $1,788   100.0    $1,748   100.0    $1,688  ($199)      -10.5

Education        Army        47.8     $26    48.2     $22    66.8     $29    47.3     $15    44.2       $11    55.7       $20    57.5       $28    54.3       $25    ($1)       -4.2
 benefits
                 Navy        19.1      11    10.3       5     9.7       4    16.3       5    18.6         5    13.2         5    11.8         6    14.8         7     (4)      -34.4
                 Air         21.5      12    24.2      11     3.1       1     4.1       1    12.6         3     7.2         3    10.2         5     9.8         5     (7)      -61.5
                  Force
                 Marines     11.6       6    17.3       8    20.4       9    32.3      10    24.7         6    23.9         9    20.5        10    21.1        10       3       53.1
====================================================================================================================================================================================
                 Total      100.0     $55   100.0     $45   100.0     $44   100.0     $32   100.0       $24   100.0       $36   100.0       $48   100.0       $47    ($9)      -15.6

Senior ROTC/     Army        54.6     $54    53.6     $41    53.3     $37    53.7     $35    56.1       $35    52.9       $36    54.1       $43    55.6       $46    ($7)      -13.3
 Platoon leader
                 Navy        20.6      20    23.3      18    21.6      15    19.4      13    16.7        11    14.0        10    15.6        12    14.4        12     (8)      -40.4
                 Air         18.8      19    17.6      14    17.7      12    18.7      12    20.2        13    26.2        18    24.5        19    24.1        20       2        8.7
                  Force
                 Marines      6.0       6     5.6       4     7.4       5     8.1       5     7.0         4     6.8         5     5.8         5     5.8         5     (1)      -18.0
====================================================================================================================================================================================
                 Total      100.0     $98   100.0     $77   100.0     $70   100.0     $65   100.0       $63   100.0       $68   100.0       $79   100.0       $83   ($15)      -15.0

Mobilization     Army        76.8     $44    80.2     $46    63.7     $28    58.3     $23    68.6       $25    78.5       $29    54.4        $9    49.1        $8   ($36)      -82.0
 training
                 Navy        12.6       7    14.3       8    19.4       9    19.3       8    12.9         5     7.3         3    16.3         3    15.2         2     (5)      -66.0
                 Air          3.8       2     0.6       0     3.3       1     9.6       4     6.0         2     7.5         3    12.5         2    19.4         3       1       42.8
                  Force
                 Marines      6.8       4     4.9       3    13.6       6    12.8       5    12.6         5     6.7         2    16.9         3    16.4         3     (1)      -32.2
====================================================================================================================================================================================
                 Total      100.0     $57   100.0     $57   100.0     $45   100.0     $40   100.0       $37   100.0       $37   100.0       $16   100.0       $16   ($41)      -71.8
School training  Army        62.2    $127    65.0    $137    56.6    $114    54.6     $94    42.0       $65    45.8       $71    51.6       $86    47.5       $65   ($61)      -48.5
                 Navy         6.5      13     6.5      14     6.2      13     6.3      11     4.7         7     4.3         7     3.8         6     4.2         6     (7)      -55.8
                 Air         26.7      54    24.7      52    32.5      66    33.8      58    48.0        74    42.9        66    37.7        63    43.9        60       6       10.9
                  Force
                 Marines      4.7      10     3.8       8     4.6       9     5.3       9     5.3         8     7.0        11     7.0        12     4.4         6     (4)      -37.0
====================================================================================================================================================================================
                 Total      100.0    $204   100.0    $211   100.0    $202   100.0    $172   100.0      $155   100.0      $155   100.0      $167   100.0      $137   ($66)      -32.6

Special          Army        39.2    $123    46.8    $157    37.8    $139      30     $90    25.1       $77    35.8      $115    21.4       $51    23.7       $49   ($75)      -60.4
 training
                 Navy        15.1      48    14.3      48    13.3      49    17.3      52    12.8        39    12.4        40    10.3        25    10.6        22    (26)      -54.1
                 Air         38.9     123    31.7     107    41.6     153    45.0     135    51.9       158    43.6       140    57.3       136    58.8       121     (2)       -1.5
                  Force
                 Marines      6.8      21     7.2      24     7.3      27     7.7      23    10.1        31     8.3        27    10.9        26     6.8        14     (7)      -33.8
====================================================================================================================================================================================
                 Total      100.0    $315   100.0    $336   100.0    $368   100.0    $299   100.0      $305   100.0      $321   100.0      $238   100.0      $206  ($109)      -34.7

Junior ROTC      Army        40.6      $7    43.0      $8    47.7     $12    35.0     $13    47.3       $18    42.1       $17    32.6       $13    37.7       $14      $8      118.7
                 Navy        24.1       4    22.8       4    21.3       5    30.5      12    20.1         8    30.6        13    27.7        11    25.9        10       6      153.5
                 Air         26.3       4    24.1       4    23.6       6    26.3      10    25.3        10    19.0         8    27.2        11    28.5        11       7      154.7
                  Force
                 Marines      9.0       1    10.1       2     7.4       2     8.1       3     7.3         3     8.3         3    12.6         5     7.9         3       2      107.5
====================================================================================================================================================================================
                 Total      100.0     $16   100.0     $18    100.     $24   100.0     $38   100.0       $39   100.0       $41   100.0       $41   100.0       $38     $22      135.5

Health                       35.7     $20    37.9     $24    35.3     $22    30.9     $18    29.7       $18    29.4       $18    28.9       $18    29.3       $18    ($3)      -13.0
 professions      Army
 scholarship
 program
                 Navy        29.3      17    29.9      19    32.7      20    31.9      19    32.9        20    34.9        21    34.8        21    35.4        21       5       28.1
                 Air         35.0      20    32.2      20    32.0      20    37.2      22    37.5        22    35.6        22    36.3        22    35.3        21       1        6.6
                  Force
====================================================================================================================================================================================
                 Total      100.0     $57   100.0     $62   100.0     $62   100.0     $60   100.0       $60   100.0       $61   100.0       $62   100.0       $60      $3        5.9

Branch officers             100.0     $74   100.0     $83   100.0     $59   100.0     $42   100.0       $31   100.0       $18   100.0        $6   100.0        $5   ($69)      -93.1
 basic course     Army

Chaplain         Army       100.0      $2   100.0      $2   100.0      $2   100.0      $2   100.0        $2   100.0        $2   100.0        $2   100.0        $2      $0       20.5
 candidates

====================================================================================================================================================================================
Total direct                       $5,742          $5,405          $5,722          $5,275            $5,118            $4,833            $4,665            $4,456  ($1,28      -22.4
 program                                                                                                                                                               5)

Reimbursable     Army        70.6      $7    66.3      $6    69.9      $7    66.7      $7    31.1        $5    32.6        $5    38.2        $3    35.5        $4    ($3)      -47.8
 costs
                 Navy         2.4       0     6.3       1     7.2       1     3.2       0    55.4         9    58.3         9    47.2         4    51.8         6       5     2189.3
                 Air         18.8       2    18.8       2    14.5       1    22.6       2     8.8         1     5.6         1     9.0         1     8.2         1     (1)      -54.8
                  Force
                 Marines      8.2       1     8.8       1     8.4       1     7.5       1     4.7         1     3.5         1     5.6         1     4.5         0       0      -42.6
====================================================================================================================================================================================
                 Total      100.0     $10   100.0      $9   100.0      $9   100.0     $10   100.0       $16   100.0       $15   100.0        $9   100.0       $11      $0        4.0
Total            Army        46.4  $2,667    46.7  $2,529    45.5  $2,609    44.6  $2,359    44.1    $2,262    46.1    $2,234    45.5    $2,126    44.5    $1,989  ($678)      -25.4
 obligations
                 Navy        33.1   1,901    34.4   1,860    33.5   1,921    33.8   1,785    32.8     1,682    30.1     1,458    29.6     1,384    30.3     1,352   (549)      -28.9
                 Air         14.0     803    12.8     694    14.2     813    14.6     773    16.1       827    16.4       795    16.8       785    16.9       755    (48)       -5.9
                  Force
                 Marines      6.6     381     6.1     332     6.8     389     7.0     368     7.1       362     7.5       361     8.1       379     8.3       371    (11)       -2.8
====================================================================================================================================================================================
                 Total      100.0  $5,752   100.0  $5,414   100.0  $5,731   100.0  $5,285   100.0    $5,133   100.0    $4,848   100.0    $4,674   100.0    $4,467  ($1,28      -22.3
                                                                                                                                                                       5)

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note:  Some columns do not add because of rounding. 

                                                                        (Dollars and personnel in millions and
                                                                                  shares in percent)



                                   Person          Person          Person          Person          Personne          Personne          Personne          Personne
Personnel level  Service    Share     nel   Share     nel   Share     nel   Share     nel   Share         l   Share         l   Share         l   Share         l  Change    Percent
---------------  --------  ------  ------  ------  ------  ------  ------  ------  ------  ------  --------  ------  --------  ------  --------  ------  --------  ------  ---------
End strength     Army        52.1  0.2991    51.8  0.2999    53.2  0.3027    52.0  0.2759    53.3    0.2599    52.3    0.2413    51.7    0.2300    50.4    0.2150  (0.084      -28.1
                                                                                                                                                                       1)
                 Navy        26.0  0.1494    26.0  0.1505    25.0  0.1423    25.0  0.1324    22.1    0.1076    21.8    0.1006    22.2    0.0989    22.5    0.0959  (0.053      -35.8
                                                                                                                                                                       5)
                 Air         14.1  0.0806    14.6  0.0843    14.4  0.0819    15.2  0.0806    16.3    0.0796    17.0    0.0783    16.6    0.0740    17.2    0.0733  (0.007       -9.1
                  Force                                                                                                                                                3)
                 Marines      7.8  0.0445     7.6  0.0440     7.4  0.0422     7.9  0.0417     8.3    0.0407     8.9    0.0409     9.5    0.0423     9.9    0.0420  (0.002       -5.6
                                                                                                                                                                       5)
====================================================================================================================================================================================
                 Total      100.0  0.5736   100.0  0.5787   100.0  0.5691   100.0  0.5306   100.0    0.4878   100.0    0.4611   100.0    0.4452   100.0    0.4262  (0.147      -25.7
                                                                                                                                                                       4)

Average          Army        52.8  0.3138    53.1  0.3071    52.3  0.3066    52.9  0.2862    52.2    0.2619    52.8    0.2481    51.8    0.2331    50.9    0.2203  (0.093      -29.8
 strength                                                                                                                                                              5)
                 Navy        25.8  0.1532    26.7  0.1545    26.3  0.1453    24.8  0.1340    24.1    0.1206    21.7    0.1022    22.2    0.0997    22.5    0.0974  (0.055      -36.4
                                                                                                                                                                       8)
                 Air         14.1  0.0838    12.4  0.0719    14.0  0.0820    14.6  0.0792    15.5    0.0779    16.9    0.0777    16.9    0.0759    17.0    0.0734  (0.010      -12.4
                  Force                                                                                                                                                4)
                 Marines      7.4  0.0440     7.8  0.0452     7.4  0.0434     7.7  0.0416     8.2    0.0409     8.6    0.0402     9.2    0.0412     9.6    0.0417  (0.002       -5.2
                                                                                                                                                                       3)
====================================================================================================================================================================================
                 Total      100.0  0.5948   100.0  0.5787   100.0  0.5773   100.0  0.5410   100.0    0.5013   100.0    0.4682   100.0    0.4499   100.0    0.4328  (0.162      -27.2
                                                                                                                                                                       0)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note:  Some columns do not add because of rounding. 


*** End of document. ***