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 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2025– | 2025– | |
Change in discretionary spending | |||||||||||||
Budget authority | 0 | -0.3 | -0.9 | -1.5 | -2.1 | -2.5 | -2.6 | -2.7 | -2.8 | -3.0 | -4.8 | -18.4 | |
Outlays | 0 | -0.2 | -0.7 | -1.3 | -1.9 | -2.3 | -2.5 | -2.6 | -2.7 | -2.9 | -4.1 | -17.1 | |
Change in mandatory outlays | 0 | 0.1 | 0.4 | 0.7 | 1.0 | 1.2 | 1.2 | 1.2 | 1.2 | 1.2 | 2.2 | 8.2 | |
This option would take effect in October 2025.
About 40 percent of the discretionary savings displayed in the table are reductions in intragovernmental payments. Such transactions would transfer resources from one category of the budget to another: Having fewer military personnel would lower the Department of Defense's (DoD's) payments for retirement accruals and Social Security contributions, but those smaller payments would reduce federal receipts by an equal amount and thus would fully offset the savings. About 90 percent of the increase in mandatory outlays shown above represents the reduction in those offsetting receipts.
The reduced cost to DoD of having fewer military personnel would be partially offset by the increased cost to DoD of having more civilian personnel and the increased cost to the Department of Veterans Affairs of some veterans' receiving health care benefits earlier than anticipated in the Congressional Budget Office's baseline. Some of the cost for veterans' health care would 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 jobs that are not inherently military in nature, like medical support roles, logistics, or administration; those jobs could be performed by civilian employees or contractors. In the Congressional Budget Office's assessment, a smaller number of civilians could provide the same quantity and quality of services at a lower cost than are currently provided by military personnel. Civilian staffing requires fewer personnel because civilians receive less on-the-job training, do not have to devote part of the work year to general military training, and are less likely to rotate among positions as rapidly as military personnel.
Under this option, DoD would replace, over four years, 80,000 active-duty military personnel in commercial jobs with 64,000 civilian employees.