The United States Army is involved in a total organizational redesign of its combat and support units to better meet current and future operational requirements. This redesign effort, as well as associated rebalancing, stabilization, and cyclical readiness initiatives are deemed important by proponents as they are intended to sustain both the active and reserve Army through a potentially long term, manpower and resource intensive war on terror. The overall issue facing Congress is how well the Army's modularity program is progressing and what are some of the issues affecting this major redesign effort. Also of critical importance is the Army's ability to fund both the Future Combat System (FCS) program and its modularity program concurrently. Key potential oversight questions for the 110 th Congress can be summarized as follows: How will the Administration's proposed increase of 65 thousand soldiers impact the modularity program? Are some Brigade Combat Teams vulnerable to enemy armor? Is the Army's overly-optimistic in its ability to fully fund modularity and the Future Combat System (FCS)? How are the Army's rebalancing, stabilization, and cyclical readiness efforts progressing and what are their associated costs? How does the Army's Force Generation Model impact the manning and equipping of Army modular forces? The 110 th Congress's decisions on these and other related issues could have significant implications for U.S. national security, Army funding requirements, and future congressional oversight activities. This report addresses the U.S. Army's redesign of its current force structure, based on large divisions, into one based on smaller brigade-level modular brigade combat teams (BCTs). The Army maintains that by organizing around BCTs and Support Brigades, it will be able to "better meet the challenges of the 21 st century security environment and, specifically, jointly fight and win the Global War on Terrorism (GWOT)." Accordingly, the Army hopes that modularization will result in: At least a 30% increase in the combat power of the Active Component of the force; An increase in the rotational pool of ready units by at least 50%; Army operating forces that require less augmentation when deployed—reducing the requirement for ad hoc organizations; Creation of a deployable joint-capable headquarters and improvement of joint interoperability across all Army units; Force design upon which the future network centric developments [Future Combat System] can be readily applied; Reduced stress on the force through a more predictable deployment cycle: One year deployed and two years at home station for the Active Component; One year deployed and four years at home station for the Reserve Force; One year deployed and five years at home station for the National Guard Force; and Reduced mobilization times for the Reserve Component as a whole. With the Department of Defense's (DOD) January 19, 2007 announcement on increasing the size of the Army and Marine Corps the Army currently plans to create the following numbers and types of BCTs in the active Army and Army National Guard (ANG): In 2005, the Army defined the roles, designs and numbers of support brigades to be developed. The modular support brigades consist of both single function and multi-functional designs. The Army's Multi-Functional Support Brigades include Combat Aviation Brigade (CAB): Consisting of between 2,600 to 2,700 personnel and a variety of Army aviation assets; Fires Brigade: Consisting of between 1,200 and 1,300 personnel, the Fires Brigade is to have a mix of cannon, rocket, and missile artillery systems and is to be able to employ Joint fires (Navy, Marine Corps, and Air Force) as well; Combat Support Brigade (Maneuver Enhancement) (CSB (ME)): Consisting of 435 personnel, the CSB (ME) is to have engineer, military police, nuclear, biological, and chemical (NBC) defense, and air defense units assigned to it. In addition, the brigade could also have explosive ordnance disposal and civil affairs units assigned to it; Battlefield Surveillance Brigade: Consisting of 997 personnel, the Battlefield Surveillance Brigade is to consist of an intelligence battalion, support troops, and a long-range surveillance detachment. In addition, the brigade can be augmented with special forces units as well as additional unmanned aerial vehicles; and Sustainment Brigade: Consisting of 487 personnel, the Sustainment Brigade is to have medical, finance, human resources, ammunition, transportation, maintenance, and supply and service units. The Army currently plans to field the following numbers of Active, National Guard, and Reserve Multi-Functional Support Brigades as indicated in Table 2 . The Army also plans to create the following types of Functional Support Brigades in the active and reserve components: Air Defense; Engineer; Military Police; Chemical; Military Intelligence; Signal; Explosive Ordnance Disposal; Quartermaster; Medical; Logistics Regional Support Groups; Civil Affairs; and Psychological Operations. The Army has compiled a number of "lessons learned" about modular units in combat. Commanders maintain that modular BCTs are better in interacting with other service's tactical elements and that the permanent task organization of critical core components has eliminated "multiple bosses" thereby simplifying command and control. Modular BCTs have also exhibited a "significant increase in situational awareness for brigade commanders based on increased battle command systems." Commanders also provided favorable comments on the enhanced BCT staffs and organic combat support and service support elements within modular BCTs. Commanders also identified areas in need of improvement. Additional earthmoving capability was identified as a need as was more capability in the BCT's armed reconnaissance squadron to "fight for information." Commanders also maintain that additional intelligence analysis capability is needed in the BCTs and that BCTs lack organic engineer assault breaching and gap crossing capability. Of critical concern to commanders was the need for greater bandwidth capacity to support battle command systems. The Army plans to continue to evaluate lessons learned from combat experiences and to make changes to personnel, equipment, and force structure when appropriate. The Army has initiated changes for both the BCTs and modular support units in terms of force protection, navigational capability, physical site protection, as well as convoy security and improvised explosive device (IED) protection based on these "lessons learned" as well as independent analysis by other Army organizations. An Army study, conducted by the Army Training and Doctrine Command (TRADOC), reportedly concludes that modular infantry BCTs (IBCTs) and Stryker BCTs (SBCTs)—which constitute over 60% of the Army's combat brigades—lack tactical lethality during the early deployment phase of expeditionary operations. The Army Study—"Close-Combat Lethality Line-of-Sight Capabilities-Based Assessment"—supposedly maintains that IBCTs and SBCTs as currently organized and equipped are unable to: Achieve desired effects against main battle tanks equipped with active protection systems; Achieve desired effects against main battle tanks with or without explosive reactive armor at extended ranges out to 6,600 meters; Identify vehicle targets up to 5,500 meters from the shooting platform; and Achieve desired effects against other armored vehicles with active protection systems. Proposed solutions to these deficiencies include modifying tactics such as employing volley fires to overwhelm active protection systems and developing better equipment to increase the lethality of IBCTs and SBCTs. According to the Army, by the end of FY2006 they had converted 31 active BCTs and during the year, another four active BCTs began modular conversion. The Army National Guard (ARNG) continued the modular conversion of seven BCTs begun in FY2005 and started the conversion of nine additional BCTs in FY2006 for a total of 16 BCTs converting. During FY2006, a total of 45 multi-functional support brigades and 86 functional support brigades were converting in the active and reserve components. During FY2007, the active Army will have 35 BCTs and another three BCTs converting. On January 19, 2007, DOD announced that the modularization of two BCTs would be accelerated, bring the number of BCTs undergoing modular conversion in FY2007 to five. These two accelerated BCTs are expected to be ready to deploy to Iraq in FY2008 if required. In FY2007, the ARNG will begin the modular conversion of nine more BCTs and by the end of FY2007, an additional 13 multi-functional support brigades will be converted. During FY2007, the functional support brigades will increase by four in the active component and 6 in the ARNG. From FY2008-FY2013, the Army plans to convert the following units to the modular design: The President's FY2007 Budget Request included $6.6 billion for modularity in FY2007 and an additional $34 billion between FY2008 and FY2001 but modularity costs are spread among a wide variety of Army programs, which makes it difficult for many to characterize an exact figure for Army modularity. The FY2007 National Defense Authorization Act ( P.L. 109-364 ) added $548.9 million for Army modularity, and directed it to be spent on M-1 Abrams, M-2 and M-3 Bradley, and M-113 armored personnel carrier refurbishment. In addition, the Army was directed to develop a multi-year procurement strategy for the Abrams tank and the Bradley fighting vehicle and to also provide Congress with the full costs of Army modularity. Army cost estimates have increased significantly since January 2004 when the Army initially estimated that it would cost $20 billion from FY2004-FY2011 to increase the number of active Army brigade combat teams from 33 to 48. According to GAO in July 2004, the Army added $ 8 billion to reorganize the reserve component—bringing the estimated cost for the entire force to $28 billion. In March 2005, the Army revised their figures and estimated that modularity would cost at total of $ 48 billion from FY2005-FY2011—a 71% increase over the earlier $28 billion estimate. In April 2006, the Army once again revised its modularity cost estimate to $52.5 billion - $ 41 billion for equipment, $5.8 billion for military construction and facilities, and $5.7 billion for sustainment and training. This most recent total does not reflect requirements for creating modular forces for the Army's recently announced 65 thousand soldier endstrength increase. There has been long-standing concern that the Army will be unable to afford modularity and the Future Combat System (FCS)—the Army's $230 billion modernization program. Also competing for Army resources are equipment reset and the costs of the wars in Iraq and Afghanistan. Program cost growth in both the modularity and FCS programs has also contributed to skepticism that the Army will be able to afford both programs, given current and projected budgetary pressures. The Army contends that modularity, FCS, and equipment reset are affordable. While the Army has made a variety of program adjustments to continue funding modularity and FCS, the Army's main argument is based on the Army receiving a larger share of programmed defense resources, noting that during World War II, defense spending was 38% of Gross Domestic Product (GDP) but in FY2007, defense spending was only 3.9% of GDP. While it is likely the Army will receive additional resources for modularity, FCS, and equipment reset, there do not appear to be any advocates to increase military spending as a greater percentage of GDP. This apparent lack of support calls into question the Army's underlying argument on the concurrent affordability of modularity and FCS. Prior to DOD's January 2007 announcement that it would increase the size of the active Army by 65 thousand soldiers, there were concerns that it would be difficult to fully man modular forces. The Army's decision to convert to a modular force structure significantly changed the requirement for Army officers. The Army's previous plan to convert to 42 modular BCTs increased the Army's requirement for officers by 4,131. Approximately 88% of this increase—3,635—represent requirements for captains and majors. This requirement for captains and majors has resulted in a projected shortage of 2,708 in FY2007 and an additional shortage of 3,716 in FY2008 in these grades. The recent announcement that the Army would now create 48 BCTs and additional modular support brigades will undoubtedly exacerbate these projected shortages in the grades of captain and major and might also create additional shortages in both officer and enlisted grades. These potential shortages might significantly affect the ability of the Army to adequately man not only BCTs but also modular support units. If this is the case, the Army might be hard-pressed to create the additional 6 BCTs that it needs to relieve the stress on the Army. As previously stated, the Army is also faced with equipment shortages as it implements its modularity program. According to GAO, modular brigade combat teams will "require significant increases in the levels of equipment, particularly command, control, and communications equipment; wheeled vehicles; and artillery and mortars." Command, control, and communications equipment are of particular concern as they constitute what the Army considers the key enablers for the modular brigade combat teams. For example, by 2007, the Army expects to have only 62% of the heavy trucks that it needs for modular units and less than half of the Force XXI Battle Command Brigade and Below (FBCB2) command and control systems that it requires. These shortages will likely be even more pronounced in the Army National Guard that could start their modular conversions with less and much older equipment than most active Army units. On July 27, 2005, the Army announced the stationing locations for its active duty BCTs: This stationing plan does not, however, reflect the proposed addition of 65,000 additional soldiers over the next five years. The Army has not yet announced the designation of the new units or where they might be stationed but given DOD's Global Basing Strategy and 2005 Base Realignment and Closure (BRAC) decisions, it is possible that there might be difficulties in finding adequate facilities, both at home and overseas, to station these additional units. The Army has three other concurrent initiatives underway which have been described as "critical enablers" in the Army's brigade-centric reconfiguration: rebalancing and stabilizing the force and cyclic unit readiness. These initiatives involve substantial policy, organizational, and personnel changes and some observers contend that these initiatives may be more be difficult to achieve than the creation of modular BCTs and support brigades as they require significant cultural changes for the entire Army. In what the Army describes as its "most significant restructuring in 50 years," the Army is presently converting a number of units deemed less relevant to current requirements into units more appropriate to the types of operations ongoing in Iraq and Afghanistan. This change involves over 100,000 active and reserve personnel and involves decreasing certain types of units while increasing others as described in Table 5 , below. The Army maintains that rebalancing will increase its capabilities sufficiently to relieve the stress on high demand/low density units. This rebalancing is also intended to place more combat support and combat service support units back into the active component from the Reserves to improve overall deployability and sustainability, as well as to reduce requirements for immediate mobilization of reserve units. This initiative transitions the Army from an individual replacement manning system to a unit-focused system. This stabilization initiative is applicable only to Active Component forces. The objective is to keep soldiers in units longer in order to reduce historically high turnover rates of soldiers and their leaders and to foster unit cohesion and operational effectiveness. In addition, this initiative is intended to provide stability to Army families, and could ultimately save the Army money as it could result in fewer moves for soldiers and their families. In FY2006 the Army implemented a new readiness system—modeled on the cyclical readiness systems of the other Services—to replace its old "Tiered Readiness System" which, according to the Army, created a "Haves" and "Haves Not" culture - with most of the "Haves Not" consisting of Army National Guard and Reserve units. Under this readiness system, called the Army Force Generation Model, units will move through a structured progression of unit readiness over time intended to produce predictable periods of availability of trained, ready, and equipped units available for deployment. Under this model, units will fall into one of three pools: the reset/retrain pool; the ready pool; and the available pool. In the reset/retrain pool units will not be ready or available for major combat operations but could conduct homeland security and disaster relief operations. Units in the ready pool are conducting training and receiving additional personnel and equipment to bring them up to full strength and units in this pool can be deployed to meet "surge requirements" if need be. After passing the ready pool, units are assigned to the available pool for one year where they become eligible to deploy for combat and other operations. The Army hopes to maintain 20 BCTs (14 Active and 6 Reserve) in the available pool on a continuous basis. The Army maintains that the Army Force Generation Model for readiness will result in: A steady-state supply of 20 ready, fully-resourced, BCTs and supporting units; Stabilized personnel to join, train, deploy, and fight together in the same unit; Assured and predictable access to National Guard and Reserve units for operational requirements; Better ability to allocate constrained resources (particularly equipment) based on unit deployment schedules; More predictable unit deployments for soldiers, their families, and employers; and Opportunity to synchronize unit readiness with a wide variety of Institutional Army requirements such as professional schooling needed for promotion and military specialty-specific training. Congress may decide to examine how the proposed 65,000 soldier increase will impact the Army's modularity program. While there are few details available, DOD officials have proposed creating six additional active component BCTs (about 21,000 soldiers) which would leave 44,000 soldiers to be used for other purposes. Given personnel shortages in the existing BCTs and modular support units, it is reasonable to assume that an unspecified number of the remaining 44,000 soldiers will be used to fill these shortages. This scenario could result in the inability to create other types of units—either functional or multi-functional—that are needed to support the addition of six additional BCTs. Another consideration is the equipment issue. Reports suggest that current modular forces are significantly short of equipment in a wide variety categories. These shortages, combined with equipment loses from operations in Iraq and Afghanistan, have compelled the Army to adopt the Army Force Generation Model, where units are only fully equipped when they deploy on operations. These circumstances call into question the Army's ability to even marginally equip new units. For example, a new heavy brigade combat team would require the procurement of 177 armored vehicles and 870 wheeled vehicles of all classes. If new Army units are less than optimally equipped, there is a potential for a significant increase in wear and tear on the Army's existing equipment, as more units use a disproportionally smaller amount of equipment. With this increase in equipment wear and tear will likely come an increased requirement for funds for reset and equipment replacement. An expansion of 65,000 soldiers might also have an impact on current and future basing plans. New units will likely require additional training areas, barracks, and motor pools as well as family housing. Even if funds are available today to accommodate these needs, the "real estate"—at home or overseas—may not be available and the requisite physical facilities may take many years to construct, thereby precluding the Army's ability to station these forces where intended. Infantry units historically have been vulnerable to enemy armored forces and, even when equipped with anti-tank systems, are considered to be at a disadvantage when attacking enemy armored units. These vulnerabilities, however, could be exacerbated when enemy armored forces are equipped with explosive reactive armor and active protection systems. Because Infantry and Stryker BCTs constitute "early entry forces" they might conceivably come up against these "enhanced" enemy armored forces (before the Heavy BCTs can be deployed) and find themselves at a distinct tactical disadvantage. Congress might decide to examine this issue of Infantry and Stryker BCT firepower vulnerabilities with the Army in greater detail. Such an examination could address potential organizational or weapons systems changes to provide enhanced lethality or changes to employment doctrine that might mitigate these BCT's vulnerabilities. The Army contends that it can afford both modularity and the FCS program but this affordability appears to be predicated on an increased Army budget more in line with historical precedents. While it is not unreasonable to assume that the Army may receive a greater share of the defense budget as it attempts to reorganize the Army and at the same time modernize, some consider it highly unlikely that the defense budget will increase relative to GDP to World War II levels as the Army suggests. Congress may wish to address the Army's apparent assumption to insure that the Army is not basing the funding of its modularity and FCS programs on what many believe are unrealistic expectations. Congress might act to review, in greater detail, the Army's rebalancing and stabilization initiatives. The Army has characterized these initiatives as "critical" to the modular transformation of the Army, but little is publically known as to how well they are progressing in terms of new units that have been created or how stabilization is affecting unit cohesion or family life for soldiers. Given that these two initiatives involve significant structural and cultural change for the Army, they also likely have significant budgetary implications that some feel are not adequately discussed as part of Army modularity. Congress may decide to examine the Army's Force Generation Model of cyclical readiness in greater detail. This new model - a departure from the long-standing tiered readiness system - will supposedly provide the Army with a trained and ready force pool of 20 active and reserve BCTs at all times. Such a change will likely have a significant impact on how the active and reserve Army staffs, equips, and trains its units and will almost certainly have budgetary and resource implications that Congress might decide to review. Some argue that while it is beneficial to reduce readiness standards in wartime, others maintain that it permits the Army to under resource units in terms of personnel and equipment while advertising a "48 brigade combat team Army" that, in reality, it does not have in terms of soldiers and equipment. CRS Report RL32888, The Army ' s Future Combat System (FCS): Background and Issues for Congress , by [author name scrubbed]. CRS Report RL33757, U.S. Army and Marine Corps Equipment Requirements: Background and Issues for Congress , by [author name scrubbed]. CRS Report RL32965, Recruiting and Retention: An Overview of FY2006 and FY2007 Results for Active and Reserve Component Enlisted Personnel , by [author name scrubbed] and [author name scrubbed]. CRS Report RL32238, Defense Transformation: Background and Oversight Issues for Congress , by [author name scrubbed]. CRS Report RS20787, Army Transformation and Modernization: Overview and Issues for Congress , by [author name scrubbed]. CRS Report RS21754, Military Forces: What Is the Appropriate Size for the United States? , by [author name scrubbed]. CRS Report RS20649, U.S. Military Dispositions: Fact Sheet , by [author name scrubbed]. CRS Report RL32924, Defense: FY2006 Authorization and Appropriations , by [author name scrubbed].

Summary: In what the Army describes as the "most significant Army restructuring in the past 50 years," it is redesigning its current active duty division force to a 48 brigade combat team (BCT) force. The Army National Guard and Army Reserves will also redesign their forces in a similar fashion. The planned addition of active duty brigades and the conversion of Army National Guard brigades could provide a larger force pool of deployable combat units to ease the burden on units presently deployed, and possibly to shorten the length of time that units are deployed on operations. The Army has three other concurrent initiatives underway that it considers inextricably linked to its brigade-centric redesign: rebalancing to create new "high demand" units; stabilizing the force to foster unit cohesion and enhance predictability for soldiers and their families; and cyclical readiness to better manage resources and to ensure a ready force for operations. These initiatives involve substantial cultural, policy, organizational, and personnel changes. Some experts believe that modular redesign, selective rebalancing, stabilizing, and cyclical readiness are prudent actions that should provide the Army with additional deployable units and also eventually bring stability to soldiers and their families. As long as no additional significant long term troop commitments arise, many feel that these initiatives could help ease the stress on both the active and reserve forces. As the Army continues its modular conversion, it may have to contend with budget, personnel, and equipment shortages which could impede plans to build this new force as intended. Some also question if the Army can afford both its Future Combat System (FCS) program and its modularity program. The 110th Congress might decide to examine these and other concerns in greater detail. This report will be updated.