As U.S. defense budgets decline, possibly by as much as $1 trillion over the next decade, the Pentagon, Congress and defense experts are all on the hunt for ways of reducing the cost of defense without having to gut force structure and modernization. One commonly raised question is whether the Pentagon can save money by reducing the readiness of some, perhaps much of the force and to shift the balance between the Active Component and Reserve Component more towards the latter. A number of studies suggest that personnel in the Reserve Component cost only a third as much as those in the Active Component.
While the answer to the question are reserves cheaper than active duty personnel is yes, this does not mean that the Department of Defense would actually save money by shifting more forces from the Active to the Reserve Component. The principal reason for this is that the Reserve Component only costs less when they are not used. As soon as they are activated they cost as much as the Active Component. Moreover, it may be more expensive to take the readiness of individuals and units down and up than it is to maintain them at a state of high readiness. Units that require lots of training or continuous maintenance on platforms and weapons systems to be even minimally effective may not save much if placed in the Reserve Component. The Air Force argues that the savings from reduced readiness or rebalancing between Active and Reserve units would save very little money but have an enormous negative impact on operational responsiveness.
The right questions to ask are how often do we expect to have to activate the Reserves, for how long and to do what? It should be relatively easy to calculate the frequency with which Reserves can be activated before the cost exceeds that of retaining a larger Active Component. It would be difficult to calculate the length of time we could expect Reserve units to be mobilized. Who expected Iraq and Afghanistan to go on for more than a decade? Some missions such as occupying hostile territory may, if we are lucky, not happen too frequently. But most things the military does need to be done in peacetime.
I would note that the level of activity for the U.S. military since the end of the Cold War has been 400 percent greater than it was in the four decades that came before. I haven’t done the math but I suspect one would have to assume a level of civility and peace in the world unlike anything we have seen since the creation of the nation-state system before the shifting of large forces between Active and Reserves would be cost effective over the long-run. Of course if we assume that we will not use such forces for a very long period then we really need to ask, shouldn’t they be demobilized instead? That way all their costs could be saved.
The reality is the United States cannot remain a world power without a world-class military, one able to operate globally, rapidly and decisively. There will always be a place for a strong and capable Reserve Component. But given the speed at which events happen in the world and threats change, we should be cautious in moving much more of our military capabilities from the Active to the Reserve Component.
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