Assessing the Implications of Policy Options for the Military Personnel Budget: An Analytic Framework for Evaluating Costs and Trade Offs

The military personnel budget provides financial resources to compensate active military personnel (MILPERS).This includes pay and allowances, subsistence of enlisted personnel, permanent-change-of-station travel, andother military personnel costs. Spending on MILPERS has grown at an average annual rate of 3.3 percent peryear since fiscal year (FY) 2000, to approximately $36 billion in FY 2021. This outpaced growth in prices in theoverall economy, which averaged 1.9 percent per year for the same period. To ensure a ready workforce withoutundercutting modernization efforts, the Department of the Air Force (DAF) must explore options to maximizeMILPERS affordability. At the same time, the DAF must consider the nonmonetary trade-offs and risks thatthese options entail. The DAF needs an analytic framework to view savings, trade-offs, and risks of differentsolution options alongside one another; this report describes and applies a tool that can be used to evaluate theimplications of workforce and personnel policies on MILPERS spending.