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 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2023–
Change in Discretionary Spending  
  Budget authority 0 -0.3 -0.9 -1.6 -2.2 -2.6 -2.8 -2.9 -3.1 -3.3 -5.0 -19.7
  Outlays 0 -0.2 -0.8 -1.4 -2.0 -2.5 -2.6 -2.8 -3.0 -3.2 -4.4 -18.5
Change in Mandatory Outlays 0 0.1 0.3 0.5 0.8 0.9 1.0 1.0 1.0 1.0 1.7 6.6

This option would take effect in October 2023.

About 40 percent of the discretionary savings displayed are reductions in intragovernmental payments. Such transactions would transfer resources from one category of the budget to another: Fewer military personnel would lower the Department of Defense's (DoD's) payments for retirement accruals and Social Security contributions, but those lower payments would reduce federal receipts by an equal amount and thus would fully offset the savings. The increase in mandatory outlays above represents the reduction in those offsetting receipts.

The reduced cost to DoD of fewer military personnel would be partially offset by the increased cost to DoD of more civilian personnel and the increased cost to the Department of Veterans Affairs (VA) of some veterans' receiving health care benefits earlier than anticipated in CBO's baseline. For this budget option, all of the increased cost to VA is classified as discretionary. However, some of that cost could be paid from the Toxic Exposure Fund (TEF) established by Public Law 117-168, the Honoring Our PACT Act, enacted on August 10, 2022; TEF is a mandatory appropriation.

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, more than 300,000 active-duty members of the military work in support, or commercial, jobs that could be performed by civilian employees or contractors. In CBO's assessment, fewer civilians could provide the same quantity and quality of services provided by military personnel at a lower overall cost to the federal government because those civilians would receive less on-the-job training, would not have to devote part of the work year to general military training, and would probably not rotate among positions as rapidly as military personnel do.

Under this option, DoD would replace, over four years, 80,000 active-duty military personnel in commercial jobs with 64,000 civilian employees.