Replacing Military Personnel in Support Positions With Civilian Employees

According to data from the Department of Defense (DoD), thousands of active-duty military personnel work in support roles or in “commercial” jobs that could be performed by civilian employees. Under this option, over about five years, DoD would replace 80,000 of the 340,000 active-duty personnel in commercial jobs with civilian employees and, as a result, decrease military end strength (the number of military personnel on the rolls as of the final day of a fiscal year) by 80,000. This option includes three alternative approaches that differ in the number of civilian employees that would be required to replace the 80,000 military personnel.

Under the first alternative, DoD would replace military personnel at a 1:1 ratio, so that one civilian replaces one service member. That alternative would increase discretionary spending (that is, spending subject to appropriations) by an average of $0.5 billion per year, in nominal terms (that is, without adjusting for the effects of inflation), between 2016 and 2025, CBO estimates. Because those costs would increase as the alternative took effect, the budgetary cost of Alternative 1 would rise to about $0.6 billion by 2025 and continue to increase in subsequent years.

Under the second alternative, DoD would replace military personnel at a 1:1.25 ratio, so that four civilians replace every five service members. Such a ratio may be achievable because civilians have fewer collateral duties and do not generally rotate among positions as rapidly as military personnel do, thus enabling savings. This alternative would reduce the discretionary spending by an average of $1.2 billion per year, in nominal terms, between 2016 and 2025, CBO estimates. Because those savings would grow as the alternative took effect, Alternative 2 would reduce discretionary spending by $1.8 billion in 2025 and by larger amounts in subsequent years.

Under the third alternative, DoD would replace military personnel at a 1:1.5 ratio, so that two civilians replace every three service members. DoD achieved that ratio during efficiency initiatives conducted in the mid-2000s. Alternative 3 would reduce discretionary spending by an average of $2.3 billion per year, in nominal terms, between 2016 and 2025, CBO estimates. Because those savings would grow as the alternative took effect, Alternative 3 would reduce discretionary spending by $3.4 billion in 2025 and by larger amounts in subsequent years.

The budgetary estimates presented here differ from the annualized cost estimates presented in CBO’s report, Replacing Military Personnel in Support Positions With Civilian Employees (December 2015). The term “annualized cost” encompasses all liabilities—current and future—that the federal government incurs by employing a military service member or a civilian today, expressed as annual amounts. Unlike those annualized cost estimates, the estimates of the three alternatives in this posting do not take into account the discretionary spending for some deferred benefits—such as health care delivered by the Department of Veterans Affairs—when that spending occurs beyond the 10-year budget window. The cost estimates for this option also do not take into account secondary effects on mandatory spending that would result from changes in discretionary spending, and any effects on federal tax revenues from replacing military personnel with civilians.