Defense Downsizing: An Evaluation of Alternative Voluntary Separation Payments to Military Personnel.

Changes in the military threats to the United States have radically altered the assumptions underpinning our defense policy, leading to a reexamination of the required size and mix of military forces. The size of military forces had been predicated on a NATO scenario based on the combined threat from the Soviet Union and the Warsaw Pact. However, the collapse of this threat allows the United States to maintain a smaller military force. Downsizing our military forces began in PY92 and is scheduled to continue through at least FY99. This report presents analysis, conducted at the beginning of this drawdown, evaluating alternative strategies for achieving personnel reductions, including alternative voluntary separation offers and their utility in achieving the required reductions in personnel end- strength. Specifically, it first addresses the question of what part of the reductions should come from lowered accession levels and what part from increased separations of personnel currently in the service. It then addresses the process of how to structure separation offers to get both the number and type of desired departures as cost effectively as possible. It identifies the criteria that any separation plan should meet, evaluates proposed plans in terms of the cost to the government and perceived worth to the individual, and develops an analytic framework that the services could use as a tool to structure separation offers. The framework provides a way to estimate acceptance rates for various plans and to identify specific groups to achieve those rates.