The U.S. Army has seen its missions grow in number and intensity in recent years with the global war on terrorism and the invasion and occupation of Iraq. The resulting levels of stress that have been placed on the Army's active and reserve components have generated public debate about whether the Army's present organization is adequate for the roles that the service is playing now and will play in the foreseeable future. At the same time, the Army has begun an extensive restructuring effort, called "modularity," that is designed to significantly alter how the service is organized and how it operates in the field.

This Congressional Budget Office (CBO) study--prepared at the request of the House Committee on Armed Services--examines the Army's capability to fight wars, sustain long deployments, and deploy rapidly to overseas operations, as well as its dependence on personnel and units in the reserve component. This study also analyzes eight options for restructuring the Army, each of which would either increase the Army's ability to perform some types of missions or decrease its reliance on the reserve component. The options offer a broad overview of the general types of policy choices and trade-offs that decisionmakers will face when considering the size, structure, and capability of any plan for reorganizing the Army. In keeping with CBO's mandate to provide impartial analysis, this study makes no recommendations.

Adam Talaber of CBO's National Security Division wrote the study, under the general supervision of J. Michael Gilmore. Jason Wheelock and David Newman of CBO's Budget Analysis Division prepared the cost estimates, under the general supervision of Jo Ann Vines. Frances Lussier provided guidance and advice during the writing of this report, and Douglas Hamilton, David Moore, Barbara Edwards, Arlene Holen, and Elizabeth Robinson provided thoughtful comments on an earlier draft. In addition, Andrew Krepinevich of the Center for Strategic and Budgetary Assessments and John Tillson of the Institute for Defense Analyses offered valuable insights and comments. (The assistance of external participants implies no responsibility for the final product, which rests solely with CBO.)

Janey Cohen and Christian Spoor edited the study, and Christine Bogusz proofread it. Cindy Cleveland produced drafts of the manuscript. Maureen Costantino produced the cover and prepared the study for publication, and Annette Kalicki prepared the electronic version for CBO's Web site.

Douglas Holtz-Eakin
Director
May 2005