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The Administration is planning to expand U.S. Navy battle forces from 509 ships in 1983 to over 600 ships by the end of this decade. To support this growth, the Navy is planning to add significant numbers of active, reserve, and civilian personnel. The planned expansion raises issues about the pay and recruiting policies necessary to support it. In addition, the manpower increases come at a time when the Congress is actively pursuing ways to limit growth in defense manpower costs. At the request of the House Committee on Armed Services, this study examines the key manpower issues surrounding the 600-ship Navy and presents options that would reduce costs. In accordance with the mandate of the Congressional Budget Office (CBO) to provide objective and impartial analysis, the study offers no recommendations.

The study was written by John Enns of CBO's National Security and International Affairs Division, under the general supervision of Robert F. Hale. Several CBO staff members assisted in preparing the report. Joel Slackman produced the estimates of Navy recruiting and retention results. Patrick Haar of the Budget Analysis Division prepared many of the cost estimates. Marvin Smith reviewed the paper and provided helpful criticism as did Bruce Vavrichek. John Warner, of Clemson University, also provided useful comments on earlier drafts of the paper. (The assistance of external reviewers implies no responsibility for the final product, which rests solely with CBO.) Francis Pierce edited the manuscript, with the assistance of Nancy H. Brooks.
 

Alice M. Rivlin
Director
August 1983
 
 

SUMMARY

CHAPTER I. INTRODUCTION

CHAPTER II. MANPOWER REQUIREMENTS FOR THE 600-SHIP NAVY

• Background on Navy Manpower Requirements
• Requirement Projections

CHAPTER III. MANPOWER SUPPLY AND COSTS

• Key Assumptions About Enlisted Supply
• Supply of Career Personnel
• Supply of Recruits
• Costs Under the Navy's Plan

CHAPTER IV. ALTERNATIVE MANPOWER POLICIES AND POTENTIAL SAVINGS

• Limit Pay Raises and Increase Bonuses
• Alternative Manpower Policies

APPENDIX A. PROJECTIONS OF NAVY ENLISTED RETENTION AND RECRUITING
 

TABLES
1.	PROJECTED TOTAL DEPLOYABLE SHIPS UNDER THE NAVY'S PLANNED BUILDUP, FISCAL YEARS 1983-1990
2.	PROJECTED SHIPS ASSIGNED TO NAVAL RESERVE FORCE AND SEA LIFT COMMAND, FISCAL YEARS 1983-1990
3.	ACTIVE-DUTY PERSONNEL REQUIREMENTS BY TYPE OF BILLET UNDER THE NAVY PLAN, FISCAL YEARS 1983-1990
4.	NAVY SELECTED RESERVE REQUIREMENTS, FISCAL YEARS 1983-1988
5.	NAVY CIVILIAN MANPOWER REQUIREMENTS, FISCAL YEARS 1983-1988
6.	ESTIMATED NUMBER OF NAVY ENLISTED CAREER PERSONNEL WITH MORE THAN FOUR YEARS OF SERVICE
7.	ESTIMATED PERCENTAGES OF MALE RECRUITS WITHOUT PREVIOUS SERVICE AND WITH HIGH SCHOOL DIPLOMAS
8.	PROJECTED COSTS OF NAVY MILITARY PERSONNEL UNDER THE ADMINISTRATION PLAN, FISCAL YEARS 1984-1988
9.	PROJECTED RETIREMENT ACCRUAL CHARGES FOR NAVY MILITARY PERSONNEL UNDER THE ADMINISTRATION PLAN, FISCAL YEARS 1984-1988
10.	PROJECTED PERSONNEL COSTS FOR NAVY CIVILIANS, FISCAL YEARS 1984-1988
11.	EFFECTS OF ALTERNATIVE PAY RAISE POLICIES ON COSTS OF NAVY MILITARY PERSONNEL, FISCAL YEARS 1984-1988
12.	NAVAL RESERVE FORCE: NAVY PLAN, ADDITIONS TO THE NAVY PLAN, AND RESULTING ACTIVE-DUTY MANPOWER REDUCTIONS, FISCAL YEARS 1983-1988
13.	SEA/SHORE ROTATION RATIOS AND PERCENT OF TOUR ON SEA DUTY BY PERCENT OF ENLISTED FORCE, FISCAL YEAR 1983
14.	ALTERNATIVE SEA/SHORE ROTATION POLICIES
15.	SAVINGS (COSTS) FROM REDUCING THE ACTIVE FLEET SIZE AND THE NUMBER OF ENLISTED PERSONNEL ON SHORE DUTY, FISCAL YEARS 1984-1988
A-1.	CBO'S ASSUMPTIONS ABOUT FUTURE NAVY ENLISTED FORCES: END STRENGTH, ATTRITION, AND NUMBER OF RECRUITS WITH PREVIOUS MILITARY EXPERIENCE AND LENGTH OF INITIAL ENLISTMENT
A-2.	CBO PAY AND UNEMPLOYMENT ELASTICITIES USED FOR NAVY CAREER FORCE PROJECTIONS
A-3.	CBO REENLISTMENT RATE PROJECTIONS FOR NAVY ENLISTED PERSONNEL
A-4.	ASSUMED ELASTICITIES OF RECENT SUPPLY FOR CHANGES IN FOUR KEY VARIABLES

 

The Administration has proposed a rapid expansion of U.S. naval forces as part of its plan to revitalize U.S. defense capacity. The Navy believes that this higher force level--often referred to as a 600-ship Navy--is necessary to meet the growing threat posed by the Soviet navy and to respond to potential crises in areas such as the Middle East.

This report focuses on the key manpower issues surrounding the buildup:

• How many military and civilian personnel will be required during peacetime to support a 600-ship Navy?
  
  
• What are the key factors affecting the recruitment and retention of personnel? What effect does the level of civilian unemployment have on the supply of enlisted personnel? What will be the pay and retirement costs of the expanded Navy?
  
  
• If the pressure to hold down defense spending leads to a ceiling on manpower costs, what alternative strategies can the Navy pursue to reach its long-run objectives?

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