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Reduction in Medical Doctors.

The FAC recommended a reduction of

90 manyears and $2.24 million for doctors and dentists. Savy requirements for physicians and dentists are currently being met. We anticipate no difficulty in maintaining the strength requirements through FY 1973. Since almost qui of the FY 1973 health professionals are now on board, a reduction of 90 manyears must be achieved by early releasing of up to 200 physicians commencing in January 1973. Such action is undesirable in light of continuing requirements for top quality care for military and dependent personnel, the delicate balance that exists in the allocation of these scarce resources, and the anticipated FY 1974 shortages of physicians and dentists. Lastly, it is understood that neither Congress nor the AMA desires to abruptly terminate our contracts with medical professionals. Another consideration bearing on this issue is that we are required to absorb the implementation of the recently authorized continuation pay for dentists which is expected to result in an unprogrammed cost of $4.46 million.

Headquarters Operations (-3,000 M/Y). The DOD Military Manpower Requirements Report, referenced by the HAC report, shows that Navy bas programmed a decrease of 2,000 in the command structure which will scour during FY 1973. Enforcing an additional 3,000 manyear decrease after the start of the fiscal year would create severe personnel management problems.

The Navy agrees with the spirit of this action and is formclating a ple to restructure Headquarters and Commands in order to reduce manpower, and resources committed to this category. These plans are approaching completio and implementation will be reflected in the FY 1974 budget request. Sovere precipitous reductions in FY 1973 strength from Headquarters operations cannot be attained in the spirit of the HAC action since these activities are predominantly manned by middle-to-senior grade enlisted careerists and officers having tenure. Thus, if directed to reduce strength from Headquarters, we could only achieve the dollar reductions by reducing new accessions or executing early releases. The latter action causes a severe loss of expensively trained, experienced personnel before they can be replaced, which reducing accessions would impact directly on the fleet and lead to a shortage in base strength for producing experienced petty officers by FY 1974 1975.

Southeast Asia Amendment. The House Appropriations Committee has adjusted the initial requirement of $13,700,000 based on non-implementation of the previously planned involuntary extension program and revised estust for applicable pay and allowance items based on more current experience. The current requirement, as indicated below, is $15,200,000 or $2.500.000 more than the Committee recommended. Accordingly, the Navy can accept the major portion of the adjustment, but $1,500,000 should be restored to the budget amendment under this appropriation.

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Permanent Change of Station. The committee reduction of ST. Permanent Change of Station fund is divided into four parts: it POS Moves, Permanent Change of Station Travel, Movement of Household Goods Air and Increased Allowance for Shipment of Household Goods from Oversees.

The committee based its reduction of Unit PCS funds on the premise hat the FY 1973 overseas homeport program provided for an increase of nly one ship over the FY 1972 program and that unit move costs increased rom $4.7 million in FY 1972 to $12.1 million in FY 1973. In fact, the verseas homeport program increased by 10 units and the total program y 18 units (CONUS and overseas); further, the units involved in FY 1973 re larger with more personnel assigned. As a result, more family moves re involved. Since dependent moves are an entitlement, the program in only be reduced by restricting the overhaul and homeport change rogram. It is not feasible nor reasonable to restrict necessary fleet ganization changes and ship overhaul schedules to effect small PCS savings.

An additional reduction was assessed against accession and separation tegory moves because present planning anticipates lower attrition than iginally estimated. However, separation travel payments must still be de, whether as a reenlistment entitlement or for separation. The duction in recruit accession travel payment will be offset by the more pensive accession payments to broken service reenlistments.

The committee further described the reduction of 26,168 Operational i Rotational moves from the original to the revised budget estimates as vings". On the contrary, this reduction was necessitated by increased sts in all move categories and was required simply to remain within rall budget constraints.

The reduction in funds providing for increased allowance for shipment household goods and foreign-purchased owned vehicles will eliminate a entitlement. This will impact again on our career force as will the uction in household effects movement by air.

The committee recognized the Navy's unique sea/shore rotation problem its report. The net effect of the reduction assessed will be to further rict the moves available in the Operational and Rotational move egories which provide for the normal sea/shore rotation of our er force. The reduction in these categories resulting from the committee on approximates 7,000 moves, and when added to the 26,168 move reduction ady absorbed as a result of cost increases, equates to about 22% of the re Operational/Rotational move program as originally submitted to Congress. impact on our career force will be severe if we are forced to further billets and extend tours in order to absorb the committee reduction.

Movement of Household Goods by Air. The HAC Report reduced the >priation by $400,000 related to household goods moved by air. For the same ons stated on page 37, it is requested that $400,000 be restored to PN account.

Increased Allowance for Shipment of Household Goods. The HAC
t reduced the appropriation request by $600,000 related to the
ance for shipment of household goods. For reasons stated on
56, it is requested that $600,000 be restored to the MPN account.

Grade Creep. The HAC has recommended a reduction of $10 million in
to encourage a slowdown in promotions. While certain areas of Committee
est were identified, specific assessment against officer and enlisted
tions were not made. The following responds to the basic issue of "grade
" and the actions being taken by the Navy to conform with the desires of

ess:

OFFICER

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the authorized number of officers has declined, the ceilings on id O-6 set forth by the Officer Grade Limitation Act of 1954 have also ed, depressing strengths in grade as follows:

during June, July and August 1972 as compared with the same period in 1971. However, despite this all out effort and increased incentives, combat arms enlistments fell 23% short of requirements during these three excellent recruiting months in 1972. It is clear that the bonus must be continued at least at the present level for the remainder of FY 73. Should enlistments continue to fall short of requirements, an upward adjustment in the amount of the bonus will be required later in the year, perhaps as early as November. While such an adjustment would be premature at this time, it is essential that this option be retained. To afford the Army any degree of flexibility in bonus management the full $55 million will be required and $11.0 million should be restored.

Unit PCS Moves. The House reduced unit PCS moves by $2 million. The constraints of the FY 72/73 Military Manpower Authorizations and a changing Force Structure to accommodate reductions in Army strength have resulted in an imbalance of support and command and control units at some U.S. and overseas installations that could not be accurately forecasted in the FY 73 Budget submission. To correct these imbalances it is essential to restation tactical and support units. Tactical integrity and the requirement to promote a more efficient defensive posture in Europe have increased the intra-theater and the inter-theater unit movements. For example, in order to comply with a National Security Defense Memorandum directing an increase in the "Combat to Support" ratio of the Armed Forces stationed in Europe, the Army plans to deploy several combat units to Europe, offset by economies achieved in the support echelons by mergers, inactivations and reorganizations. The proposed reduction would limit the Army's ability to improve on the balance between support and command and control forces and on the overall defensive posture in Europe. The $2.0 million reduction should be restored.

Shipment of Foreign Automobiles. The original amount requested for FY 73 was $4.2 million which the House reduced by $2.1 million. The entitlement for personnel to ship an automobile at government expense upor permanent change of station presently exists in basic laws. The withholding of this entitlement to personnel who purchase foreign made vehicles, while allowing State Department personnel to ship foreign made automobiles is inequitable and detrimental to morale. Moreover, prohibition

of Government-sponsored shipment of foreign made autos has not been a deterrent to the purchase of such cars overseas. Due to pay increases, lower grade enlisted personnel can now afford to buy automobiles while serving overseas. The shipping prohibition only diverts the shipping revenues away from American ship lines, further contributing to the deterioration of the American Merchant Marine capability. The $2.1 million should be restored.

Increased Allowance for Shipment of Household Goods. The House reduced the request by $1.5 million. The weight allowance that may be shipped on return from overseas cannot exceed the limitation specified in the Joint Travel Regulations, less the weight of household goods stored in nontemporary storage. Because off-post quarters and government quarters oversea often lack sufficient furnishings, it has been necessary for the service member to purchase additional items during his tour. When the service member returns to the U.S., he will have to dispose of items that are in excess of his weight allowance or pay for the additional weight shipped. In either case, the service member loses monetarily through no fault of his own. The proposed budget reduction for this item and shipment of foreign automobiles will have serious impact on morale since the changes in policy have been disseminated to all levels and have received much publicity in both official channels and the news media. The $1.5 million should be restored,

Grade Creep. The officer grade structure has inflated very little, as shown at Inclosure 1, in percentages by grade from FY 64 to end FY 72.

n the grade of colonel, the FY 72 percentage is the same as FY 64. The umber of general officers, colonels, lieutenant colonels, and majors are overned by the Officer Grade Limitation Act (OGLA) enacted into law in 1954 U.S. Code). Accordingly, officer distribution is rigidly controlled in hose grades subject to this Act. Doctors and dentists were removed from GLA constraints in 1968 and better promotion opportunity was offered in an ffort to improve retention. In this regard, the number of colonels (5,591 xcluding reimbursables) at end FY 72 is within 569 of the number which were n active duty at end FY 64. This differential has occurred almost entirely 410) in the medical area (doctors, dentists, nurses, veterinarians, medical pecialists and Medical Service Corps). During the late 1960's when the rmy was undergoing a strength buildup, colonel strength did not increase roportionately but followed a curve established by OGLA. Naturally, here could not be a proportionate decrease corresponding to the reduction of overall strength. The Army has been able to meet colonel requirements y utilizing lieutenant colonels selected for promotion to colonel, igidly limiting new colonel requirements, and continually reviewing the alidity of previously approved requirements. The relatively low strength In lieutenants at end FY 72 resulted from liberal early release policies for non-career oriented junior officers to meet manyear constraints. he early release of known losses was permited instead of increasing the umber of involuntary releases of career oriented officer personnel. The time-in-service criteria for promotion increased in FY 72 over FY 71 ind is programed to extend further in FY 73. A comparison of these riteria is shown below.

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The Army has taken positive steps to reduce the grade creep in the nlisted structure in FY 73. The FY 73 enlisted promotion forecast is elow the pre-Vietnam promotion level for pay grades E-6 to E-9. FY 62 hrough FY 64 represents the pre-Vietnam period. Supporting data are as ollows:

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ormal time-in-service (TIS) criteria for promotion to pay grades E-3 to E-5 re being extended in FY 73 as follows:

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By-grade manpower authorization is the principal governing factor of enlisted promotions. To maintain service attractiveness in building a volunteer force, the Army must provide sufficient enlisted promotions. The FY 73 promotion forecast is already at the minimum essential level.

As stated in this reclama, the Army has taken positive action in controlling the grade structure of both the officer and enlisted force. The $12.0 million should be restored to preclude further reduction in promotions than currently programed.

New Lieutenant Generals.

The Army had 45 lieutenant generals assigned on 30 June 1971 of which two retired that day to bring the 1 July 1971 lieutenant general strength down to 43. At that time, it was actually authorized to have 55 0-9 positions under the OGLA as limited by the Senate ceiling. Of these remaining 43 occupied billets, 36 are defined as dedicated Army positions (Inclosure 2). Of the seven other positions, the Army possessed a reasonable capability to forecast the loss of only three. Based on the best available data at that time, the Army forecasted 43 0-9 positions in its budget submission for FY 72. In actuality, on 30 June 1972 the Army had 49 0-9 positions (one of which was reimbursable) approved by the President. The figure of 36 dedicated Army positions remained firm. The difference between 43 and 49 resulted from an increase in the number of outside-Army positions, primarily those under the auspices of the Secretary of Defense, that the Army was expected to man. These 13 positions are as follows:

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From a review of the above positions, and the fact that this represen about 25% of the number of lieutenant generals that we have on active d the difficulty of attempting to budget for 0-9 positions is clearly discernible. The fact is that most of these positions are not rotational In keeping with his policy of assignment of the best qualified officers to these positions, regardless of Service affiliation, nominations have been requested by the Secretary of Defense from all of the Services, an selections have been made personally by the Secretary of Defense. This makes it virtually impossible to forecast their inclusion in the budget submission. It is recognized that the positions identified above are at new in some cases, and many are in the category of having been filled

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