The Campaign That Nobody Discusses

or those concerned about national defense, its virtual absence as an issue in the presidential campaign is troubling. During the primary races, Democratic hopefuls Vice President Al Gore and Sen. Bill Bradley declared their support for current defense spending levels and the need to modernize the force, but they provided few specifics. On the Republican side, there was a more detailed proposal from Texas Gov. George W. Bush on shortfalls in pay and modernization, but few particulars on how this would be funded. Sen. John McCain favored better pay and more modernization but focused considerably more attention on congressional pork than on defense muscle. Given that defense is a critical federal function accounting for nearly half of all discretionary spending, we can hope that the would-be commanders in chief will offer more details as we approach the November election.

Without a serious discussion, it is likely that the most serious challenge facing the defense program of the next administration will go unnoticed. The problems associated with equipment modernization and force readiness are certainly pressing and have received some visibility, but they are secondary to the primary challenge that the next administration must address: How will we attract a sufficient number of volunteers to fill the ranks? This issue will require considerable attention from the next president, and the contenders should begin articulating their approaches sooner rather than later.

The nexus of the problem is simple. To borrow a phrase from the 1992 presidential campaign, "It's the economy, stupid!" As Federal Reserve Chairman Alan Greenspan has been emphasizing for months, we are currently experiencing a very tight labor market. The statistics of the Federal Reserve, showing record lows in the unemployment rate and growing labor demand, have been reinforced by market observations. Even the Salvation Army reported difficulty in finding people to ring the bells at its charity kettles last December. Given such conditions, it should be no surprise that our all-volunteer armed forces have experienced escalating recruiting difficulties. Despite an expansion of bonuses and an increase in recruiters, the problem is simply that unemployment rates for service-age men and women have never been this low since the all-volunteer force began in January 1973. We are truly in uncharted unemployment waters.

But low unemployment rates are just the most prominent among several factors challenging recruiters. First, the actual pool of potential enlistees is surprisingly small and possibly shrinking. There are about 14 million young Americans between the ages of 17 and 21, the prime recruiting market. While their numbers have slightly increased in the past few years, for recruiters the pool is actually shrinking. College attendance has been rising rapidly among high school graduates and according to some studies is now approaching 80 percent. Those who go to college generally do not join the armed forces. Subtracting those who attend college, those not physically or medically fit, those with serious police records, and those scoring in the bottom half of the armed forces standardized test, the services are competing for a labor pool of fewer than 800,000.

Second, the armed services' demand is relatively large. Last year all four services had a combined recruiting goal for both active and reserve components of nearly 280,000. In other words, to meet their objectives the services have to attract nearly one in three of those in the dwindling pool of potential recruits.

Third, several societal factors have combined to lower the propensity of young people to enter the armed forces. Throughout the last decade, while today's service age youth were developing their ideas of future career opportunities, the military services were reducing their numbers. A lingering image was created across America as recruiting stations closed that the armed forces were no longer hiring. The same perspective has been observed by the Selective Service System, which has experienced a steady decline in 18- to 25-year-old males registering for the draft.

In addition to the perception that military careers are no longer as attractive, the services lost significant ground in an area where they had developed a clear competitive advantage-college assistance. The Army College Fund, a modern-day successor to the G.I. Bill currently offering up to $50,000 in college assistance, brought many young high school graduates concerned about college tuition costs to the recruiting station. Today, however, there is a large and growing number of college assistance programs that lessen the appeal of this benefit. All but three states now offer some sort of tuition assistance, and the federal government provides a suite of programs from Pell Grants to the more recent Education IRAs and tax credits. As more potential recruits take advantage of these programs, the armed forces see enlistments drop.

As we enter the second generation of young men and women who have never known anything other than a volunteer American military, the presence in the household of a parent with military experience continues to decline. The same can be said of high school teachers and counselors, another group that influences the career choices of young men and women.

So what are the options that the candidates might consider? Clearly, a solution must address both supply and demand factors. On the supply side, a more concerted effort must be made to recruit those in college, certainly those who have dropped out, and perhaps those who dropped out of high school but score well on the standardized test. In addition, one can move up the supply curve by significantly increasing pay and other benefits.

This past year, Congress passed the largest military pay raise in years. However, if the 4.8 percent increase and other targeted bonuses do not fill the ranks (and many feel they will not), this is just a down payment. With military personnel now accounting for 28 percent of the defense budget, and with operations and maintenance another 37 percent, these two "operations" accounts absorb a greater percentage of the defense budget than any time in the past 50 years. Procurement and research, the "capital" accounts struggling to escape historic lows as equipment ages, will pay the bill for higher military wages unless overall defense spending significantly increases.

Which is why demand must also be addressed by the services to mitigate the practice of robbing Peter (modernization) to pay Paul (manpower and operations). The services need to privatize as many military positions as possible and take other steps to compress their force structures. Units need to be smaller and more modular, allowing them to undertake a plethora of missions without being significantly augmented or reinforced. Finally, all services, particularly the more capital-intensive, need to pursue strategies that substitute emerging technology for military manpower.

The most immediate area of interest should be in lightly manned and unmanned systems. Recent conflicts have shown that commanders are rapidly becoming comfortable with cruise missiles and unmanned reconnaissance aircraft. Technologies that are quickly maturing will allow for precise attacks by unmanned systems combining the cruise missile's reliability with the gravity bomb's low cost. Moreover, if senior leaders are increasingly sensitive to casualties, unmanned and low-manned systems are an obvious solution. As crew sizes are reduced and unmanned systems proliferate, training costs will drop. But transitioning to such a point requires that research and procurement funds be protected.

When it issued its Quadrennial Defense Review in 1997, the Pentagon proclaimed that it was embracing a "revolution in military affairs" and beginning a major transformation to new ways of fighting future wars. Many have been disappointed with the results to date. It is increasingly clear that the Defense Department will have to accelerate its transformation efforts. If it does not, it will find that the costs of manning the current force will rapidly consume the capital needed for equipping the future force. Certainly, no commander-in-chief can allow that to happen. It is, therefore, time for those contending for the job to explain how they plan to prevent it.

M. Thomas Davis is a retired Army colonel. The author of Managing Defense After the Cold War, he is directing a study of the defense planning and budgeting process for Business Executives for National Security.