Discretionary Spending

Function 050 - National Defense

Replace Some Military Personnel With Civilian Employees

CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.

Billions of Dollars 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2017-2021 2017-2026
Change in Spending                        
  Budget authority 0 -0.2 -0.6 -1.1 -1.5 -1.9 -2.0 -2.1 -2.2 -2.3 -3.4 -13.8
  Outlays 0 -0.1 -0.5 -0.9 -1.4 -1.7 -1.9 -2.0 -2.1 -2.2 -2.9 -12.9

This option would take effect in October 2017.

About 40 percent of the savings displayed in the table reflect intragovernmental transfers and thus would not reduce the deficit.

The workforce of the Department of Defense (DoD) consists of members of the active-duty and reserve military, federal civilian employees, and private contractors. According to data from DoD, thousands of members of the military work in support, or “commercial,” jobs that could be performed by civilian employees or contractors. Many of those jobs do not involve functions that could raise concerns about personal safety or national security and are performed in military units that do not deploy overseas for combat.

Under this option, over four years DoD would replace 80,000 of the roughly 340,000 active-duty military personnel in commercial jobs with 64,000 civilian employees and, as a result, decrease active-duty end strength (the number of military personnel on the rolls on the final day of the fiscal year) by 80,000. By the Congressional Budget Office’s estimate, those changes could reduce the need for appropriations by $14 billion and discretionary outlays by $13 billion from 2018 through 2026. The savings would occur primarily because fewer civilians would be needed to replace a given number of military personnel. (Civilians require less on-the-job training, do not have to devote part of the work year to general military training, and generally do not rotate among positions as rapidly as military personnel do.) Although not shown here, the long-term savings to the federal government as a whole, particularly beyond the next decade, would be larger than those amounts because, ultimately, some of the costs of military personnel are borne by other departments and because a smaller proportion of civilian pay than of military pay is exempt from federal income taxation.

Although there is precedent for such conversions (between 2004 and 2010, DoD converted about 48,000 military positions to 32,000 civilian jobs), only a small percentage of all military positions have been reviewed for that purpose. Moreover, the mix of military and civilian employees used to perform various commercial functions differs from branch to branch. For example, the Army fills 27 percent of its finance and accounting jobs with military personnel, whereas the Marine Corps staffs 64 percent of those jobs with military personnel. The Navy employs military personnel for 8 percent of its jobs in motor vehicle transportation services; the Air Force, 67 percent. If each service adopted the personnel mix with the lowest percentage of military personnel in commercial occupations, up to 100,000 jobs currently held by military personnel could be opened to civilians, CBO estimates. Under this option, 80,000 of those jobs would be filled with 64,000 civilian employees.

One argument for converting military to civilian positions is that civilians require, on average, less job-specific training over their careers because, unlike military personnel, they are not subject to frequent transfers. The military services can thus employ, on average, a smaller number of civilians than military personnel to provide the same quantity and quality of services. However, if DoD did not reduce military end strength but simply reassigned military personnel to other duties, total personnel costs would increase by an amount equal to the cost of the civilian replacements. In that case, this option would still free some military personnel to fulfill their primary mission of training for and, if necessary, engaging in combat.

An argument against this option is that even though many service members might spend part of their career in jobs that could be performed by civilians, most are trained fighters who could be deployed if needed. Replacing such military personnel with civilians could reduce DoD’s ability to surge quickly if called upon to do so. Moreover, despite the potential cost savings, the military services try to avoid converting certain types of positions because doing so could lead to reductions in effectiveness or morale and hinder their workforce management objectives. For example, the Navy must provide shore positions for sailors—so that they do not spend their entire careers at sea—even if some of those positions could be filled by civilians.