ments have lost key first responders when they were ordered to Active-Duty. Governors are concerned about whether they will have the National Guard personnel and equipment to respond to natural disasters as they occur. We continue to hear from employers about the adverse impact on small businesses and self-employed National Guard and Reserve members. Finally, some are wondering if the National Guard and Reserves will be ready the next time they are needed. In a memorandum to the Army Chief of Staff, the Chief of the Army Reserve stated that "the Army Reserve is additionally in grave danger of being unable to meet other operational requirements including those in named OPLANS and CONUS emergencies, and is rapidly degenerating into a 'broken' force." The Chief of the National Guard Bureau recently stated that "My concern is that the National Guard will not be a ready force the next time it is needed, whether here at home or abroad." Our over-reliance on the Guard and Reserve may have severely impacted on them as effective military units.

Because we have virtually exhausted our supply of ground forces, they will not be readily available if needed for yet another operation. In the assessment of the Chairman of the Joint Chiefs, the shortage of ground forces will result in taking longer to succeed in another conflict, such as any possible conflict with North Korea or Iran.

This leads us directly to the question of end strength. The overriding issue is whether the Army and Marine Corps have sufficient personnel to maintain current force levels for future rotations in Iraq and Afghanistan. Currently, Reserve Component personnel (National Guard and Reserves) constitute approximately 40 percent of the 139,000 personnel in Iraq. The Army Reserve is approaching a point at which it will soon use up all personnel available for deployment, and some reports indicate that the National Guard has used nearly all of its combat forces. It is clear that the National Guard and Reserves will not be able to relieve our Active component forces for much longer.

Many of us have been concerned about the size of our Army and Marine Corps for some time. The Administration has rebuffed our attempts over the last several years to increase the authorized end strengths of these forces. I believe that our proposed increases were sustainable when we made them because we had a much more favorable recruiting market at the time. Now I fear that it is too late. Even if we all agreed to end strength increases, we may not be able to enlist the volunteers we would need. Earlier this year, the Senate Armed Services Committee adopted a provision that would increase the Army by 20,000 soldiers over this year's authorized level, and 40,000 soldiers more than the administration requested for next year. We have to make an assessment of whether the Army can achieve that increase if it remains in the authorization act.

Now we must ask ourselves what we can do to help the Army and Marine Corps address their recruiting problems so that they can meet end strength requirements. We know that the continuing news about casualties in Iraq and Afghanistan have caused the influencers-mothers and fathers, other relatives, teachers, guidance counselors, ministers, and coaches-to discourage young men and women who would otherwise be willing to serve in the military. The improving economy and favorable job prospects have given these young people other attractive options.

The Army has been attempting to address its recruiting shortfall by adding recruiters, increasing bonuses, lowering standards, and increasing targeted advertising. But it appears that will not be enough.

I look forward to hearing what our witnesses have to say about other initiatives to address their recruiting and equipping challenges. I am particularly interested in what we can do to help.

Chairman WARNER. Secretary Chu, we recognize you.

STATEMENT OF HON. DAVID S.C. CHU, UNDER SECRETARY OF DEFENSE FOR PERSONNEL AND READINESS, ACCOMPANIED BY: HON. CHARLES S. ABELL, PRINCIPAL DEPUTY UNDER SECRETARY OF DEFENSE FOR PERSONNEL AND READINESS Dr. CHU. Thank you, Mr. Chairman. It is a great privilege to be here.

Chairman WARNER. We recognize you as senior man aboard, but perhaps the Chief of Staff of the Army would like to make some introductions.

General SCHOOMAKER. Sir, I was planning to do it within the opening statement, but I will go ahead and do it right now if you would like.

Chairman WARNER. Well then, go by your plan. We will let Secretary Chu lead off.

I am going to ask you to draw up that microphone very close to you.

Dr. CHU. Thank you, sir.

Chairman WARNER. That helps.

Dr. CHU. Thank you, Mr. Chairman, Senator Levin, members of the committee. It is a great privilege to be here this morning.

I would like to begin by offering my thanks to our extraordinary people in uniform today. We have at this table some of the Nation's most senior military leaders, and we have in our audience this morning some of the extraordinary noncommissioned officers that have been so essential to the Nation's success.

As members of this committee know, it was 32 years ago this summer that President Nixon returned the United States to its underlying tradition, and that is a tradition of a volunteer force. That force has performed magnificently over the last 20 years. We saw that performance in Panama over 15 years ago. We saw it in the First Persian Gulf War. We saw it in the protection of the Kurds during the 1990s and the enforcement of the No Fly Zone in Iraq. We have seen it in Haiti twice within recent years. We have seen it in the Balkans, in which they have brought a measure of stability. We have seen it in Afghanistan, where they have given that country an historic chance for a democratic government. We see it today in Iraq.

It is a magnificent performance. As I think General Schoomaker and General Hagee would emphasize, however, it is not simply an All-Volunteer Force; it is also an All-Recruited Force. Recruiting and retention are a constant challenge for the Department of Defense (DOD), no less so at the present moment in history.

Our success, in my judgment, in sustaining the volunteer force over the decades is the product of a partnership between the legislative and executive branches. We particularly appreciate the authorities that have been given us to achieve that success. We particularly value the bonus authorities that you have provided and that you are considering providing in this year's authorization bill, that allow us to address issues on a targeted basis. I have in mind the Reserve affiliation bonus that we have requested; the critical skills retention bonus for the Reserve Forces to parallel that offered to the Active Forces; increasing the ceiling for hardship duty pay to allow us to address the fairness of compensation based upon the burdens being borne by our personnel; the increase that the House has offered in the enlistment bonus to $30,000-some have talked of higher figures; and its endorsement of a new idea that has been brought forward of a referral reward for those who help bring others to the ranks.

There is a second way, in my judgment, that you can assist us, and you have been assisting us, and that is speaking out about the value of military service and the values that young men and women will bring back from military service to their civilian communities. Our Nation's birthday, as we all know, occurs in just a

few days and I can think of no better occasion on which to celebrate the value of military service than that date.

Thank you, sir.

[The prepared joint statement of Secretary Chu and Mr. Abell follows:]

PREPARED JOINT STATEMENT BY HON. DAVID S.C. CHU AND HON. CHARLES S. ABELL

INTRODUCTION

Mr. Chairman and members of this distinguished subcommittee, thank you for the opportunity to be here today.

The All-Volunteer Force is performing well. Although the Army is experiencing recruiting difficulties, recruiting and retention overall remains solid. Today, we will review with you the current status of military recruiting and retention and discuss some of the current initiatives we are undertaking with the Services to address the challenges we face.

Where we face challenges, we take the necessary steps to resolve problems. We continually review compensation packages to ensure that they are adequate to meet the needs of the members, whether the need be for basic pay, allowances, special pays, or survivor benefits. We work with the Services to take full advantage of the strength that comes from combining resources and knowledge, and of the research that we have done over the years to assist us.

The decisions made about authorities and funding for the next fiscal year matter a great deal to those who have volunteered to serve our Nation. We are happy to be here to answer your questions and discuss the programs that we believe are essential to sustaining our volunteer military in meeting our National security requirements.

ACTIVE DUTY RECRUITING AND RETENTION

The success of our All-Volunteer Force begins with recruiting, and the viability of the force is assured with successful retention. This has been easier in some years than it has in others. We gratefully acknowledge how Congress provides additional resources during the more challenging times to facilitate our success in both recruiting and retention.

Active Duty Recruiting

During fiscal year 2004, the military Services recruited 176,026 first-term enlistees and an additional 6,799 individuals with previous military service into their Active-Duty components, for a total of 182,825 Active-Duty recruits, attaining over 100 percent of the DOD goal of 181,308 accessions.

While meeting our quantitative goals is important, we also need to have the right mix of recruits who will complete their term of service and perform successfully in training and on the job. The “quality” of the accession cohort is critical. We typically report recruit quality along two dimensions-aptitude and educational achievement. Both are important, but for different reasons.

All military applicants take a written enlistment test called the Armed Services Vocational Aptitude Battery (ASVAB). One component of that test is the Armed Forces Qualification Test (AFQT), which measures math and verbal skills. Those who score above average on the AFQT are in Categories I-IIIA. We value these higher-aptitude recruits because they are easier to train and perform better on the job than their lower-scoring (below average) peers (Categories ÎIIB-IV).

We also value recruits with a high school diploma because they are more likely to complete their initial 3 years of service. About 80 percent of recruits who have received a high school diploma complete their first 3 years, yet only about 50 percent of those who have not completed high school will make it. Those holding an alternative credential, such as a high school equivalency or a General Educational Development (GED) certificate, fall between those two extremes.

In conjunction with the National Academy of Sciences, the Department developed a mathematical model that links educational attainment, aptitude, and recruiting resources to job performance. With this model we established recruit quality benchmarks of 90 percent high school diploma graduates and 60 percent scoring above average on the AFQT. Those benchmarks were set by examining the relationship among costs associated with recruiting, training, attrition, and retention, using as a standard the performance level obtained by the enlisted force cohort of 1990. Thus, the benchmarks reflect the aptitude and education levels necessary to mini

mize personnel and training costs while maintaining the required performance level of that force.

Over the past 20 years, the military Services have met or exceeded the Department's benchmarks for quality recruits. The quality of new Active-Duty recruits remained high in fiscal year 2004. DOD-wide, 95 percent of new Active-Duty recruits were high school diploma graduates (against a goal of 90 percent) and 73 percent scored above average on the AFQT (versus a desired minimum of 60 percent).

Through May of fiscal year 2005, all Services except Army continued to meet or exceed both quantity and quality objectives for Active duty enlistees. The Army has achieved 40,964 of its 49,285 accession goal through May, for an 83 percent accomplishment. Army quality levels, however, remain strong (Table 1).

Table 1. FY 2005 Active Duty Enlisted Recruiting Through May

The Army is applying additional resources to achieve its recruiting goal of 80,000 soldiers by the end of the fiscal year. The Army is aggressively pursuing three avenues of approach: (1) adding active duty recruiters; (2) offering stronger incentives, with increased enlistment bonuses and an increase in the Army College Fund; and (3) using more targeted advertising, focusing on "influencers," particularly parents. The Services accessed 16,431 commissioned officers to Active Duty in fiscal year 2004, with Army, Navy, and Marine Corps meeting their numerical commissioning needs. In fiscal year 2005, Active-Duty officer accessions are on track in all Services for numerical success this year.

Active-Duty Retention

Over the past 3 years, the Department has worked to improve servicemembers' quality of life. We continue to work with Congress to achieve needed military pay raises, and to develop flexible and discretionary compensation programs. We have every confidence that such funding and policy modifications will be sufficient to ensure continued success in achieving authorized strength levels.

Army and Marine Corps met or exceeded fiscal year 2004 retention goals. Navy and Air Force were retaining more than their desired levels at the outset of the year, but force-shaping initiatives aimed at balancing manpower skills and assisting with force reduction caused them to retain fewer members during the last quarter of fiscal year 2004. For fiscal year 2005, retention is on track (Table 2).

Table 2. FY 2005 Active Duty Enlisted Retention Through May 2005

The Army is the only Service currently using Stop Loss. The Army Stop Loss program affects less than 1 percent of the total force (9,044 Active component soldiers, 3,762 USAR soldiers, and 2,480 ARNG soldiers in May 2005). The active Army Unit Stop Loss program takes effect 90 days prior to unit deployment or with official deployment order notification, and remains in effect through the date of redeployment to permanent duty stations, plus a maximum of 90 days. Reserve Component Unit Stop Loss begins 90 days prior to mobilization or with official mobilization alert deployment order notification, and continues through mobilization, and for a period up to 90 days following unit demobilization.

Army initiatives of Modularity, Restructuring, and Rebalancing the Active/Reserve component mix, and Force Stabilization will, over time, eliminate any need for Stop Loss.

RESERVE COMPONENT RECRUITING AND RETENTION

There has been considerable discussion about the stress that the global war on terrorism is placing on the force-both Active and Reserve. A repeated question is: What levels of utilization can the National Guard and Reserve sustain while still maintaining a viable Reserve Force? Recognizing that the global war on terrorism will last for a number of years, the Department established a strategic approach to ensure the judicious and prudent use of the Reserve components in support of the war effort. We will continue to assess the impact of mobilization and deployments on the National Guard and Reserve, and adjust our policies as needed to sustain the Reserve components.

One way to examine mobilization of the National Guard and Reserve is in terms of today's force-those who are currently serving in the force. Of the 838,300 Reserve component members who are currently serving in the Selected Reserves, 364,860 have been mobilized between September 11, 2001 and February 28, 2005— representing 43.5 percent of the current force.

Compared to Operation Desert Storm when we mobilized 30,000 Individual Ready Reserve (IRR) members, we have not used the IRR in an aggressive manner to support the global war on terrorism. In the past 3 years, we have mobilized 8,790 IRR members. However, further utilization of the IRR remains a viable option for meeting both near-term and long-term commitments.