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, and other military personnel costs.

Spending on MILPERS has grown at an average annual rate of 3.3 percent per year since fiscal year (FY) 2000, to approximately $36 billion in FY 2021. Growth in MILPERS spending at this rate threatens to undermine readiness and crowd out future efforts to modernize key military capabilities.

To help better manage and control spending on MILPERS, the deputy chief of staff for Manpower, Personnel and Services (AF/A1) needs tools to understand the future cost implications of workforce and personnel policies that the Air Force might pursue. This report describes and applies one such tool that can be used to evaluate the implications of workforce and personnel policies on MILPERS spending. The tool integrates models that simulate how policy changes might reshape the personnel inventory with a derivative pay table that contains elements that make up standard composite pay rates. The tool can be used to translate workforce and personnel policies into changes in the personnel inventory and changes in MILPERS spending. A series of simulation studies show that certain personnel policies would allow the U.S. Air Force to save tens of millions to hundreds of millions of dollars annually without making changes to pay and allowances, end strength, or grade strength. Larger levels of savings require additional changes beyond personnel policies.