Congress has established four military ranks above the rank of colonel (for the Army, the Air Force, and the Marine Corps) and captain (for the Navy). Table 1 displays the pay grade designation, title of rank, and insignia worn by officers at general and flag officer ranks. Title 10 of the U.S. Code establishes service-specific ceilings for active duty general and flag officers that total 877. Title 10 also authorizes 12 general and flag officer positions to be allocated by the Chairman of the Joint Chiefs of Staff to the services for joint duty positions. These authorizations do not count against the service ceilings. Title 10 establishes maximum limits on the percentage of general and flag officers that may serve in certain pay grades. Specifically, no more than 50 percent of all general or flag officers in each service may serve in a pay grade above O-7. Between 15.7 and 16.2 percent of a service’s general or flag officers may serve in pay grades O-9 and O-10. Finally, of a service’s general or flag officers in grade O-9 and O-10, a maximum of 25 percent may be in grade O-10. The National Defense Authorization Act for Fiscal Year 2003 directed DOD to review legislative limitations affecting the management of general and flag officers and directed DOD to submit a report to Congress. DOD submitted a report in March 2003. In its report, DOD stated that its review pointed to the merit of additional general and flag officer management flexibilities that would increase the department’s ability to respond to ever-changing events. The report also recommended changes in legislation to improve general and flag officer management. In April 2003, DOD submitted a legislative package to Congress—the Defense Transformation for the 21st Century Act of 2003—that included several proposals aimed at enhancing the department’s flexibility in managing general and flag officers. Congress did not enact these proposals. In March 2004, DOD resubmitted many of the same proposals to Congress for consideration as part of the National Defense Authorization Act for Fiscal Year 2005. DOD’s fiscal year 2005 legislative proposals are aimed at eliminating or amending statutory provisions that the department believes restrict its flexibility in managing general and flag officers. One group of the fiscal year 2005 legislative proposals would make changes affecting general and flag officer career length as well as retirement compensation. A proposal to increase the maximum retirement age from 62 to 68. Currently, commissioned officers generally must retire upon reaching age 62. The President may defer the retirement of an officer serving in a grade above O-8 to age 64. No more than 10 such deferments may be in effect at any one time. DOD’s proposal would extend the maximum retirement age to 68 for general and flag officers and would allow the Secretary of Defense to defer retirement of a general and flag officer to age 72. There would be no limit on the number of deferments to age 72. A proposal to eliminate limits on the total allowable years of military service and time in grade. Currently, general and flag officers must retire upon reaching specified limits on the total years of active commissioned service or time in grade. These limits vary by pay grade. DOD’s proposal would set no limit on the total allowable years of active commissioned service and time in grade. A proposal to eliminate a requirement that general and flag officers spend at least 3 years time in grade in order to retire in that grade. In addition to the 3-year time-in-grade requirement, existing law mandates that a general or flag officer in pay grade O-9 or O-10 may retire in that grade only after the Secretary of Defense or his designee certifies to the President and Congress that the officer served on active duty satisfactorily in that grade. Under DOD’s proposal, a general or flag officer at any pay grade may retire in their current grade as long as the officer has served satisfactorily. The proposal also would eliminate the certification requirement for officers retiring in grade O-9 and O-10 and instead would require the approval of the military department concerned and concurrence by the Secretary of Defense or his designee. Proposals to remove limitations on retirement pay. Currently, basic pay— the pay used to calculate retirement pay—is capped at the rate of pay for level III of the federal civilian Executive Schedule, and retirement pay is capped at a maximum of 75 percent of base pay. Under one DOD proposal, the basic pay cap would be removed for the purposes of calculating retirement pay. The pay cap would remain in place while the officer is serving on active duty. A second DOD proposal would allow general and flag officers who stay in military service longer than 30 years to receive retirement pay that exceeds the current limit of 75 percent of base pay. A second group of legislative proposals would change restrictions on the term limits for officers holding specified senior positions and on the lateral reassignment of officers. A proposal to eliminate existing restrictions on the length of terms of the service chiefs of staff. The service chiefs are appointed to a 4-year term by the President, by and with the advice and consent of the Senate. They serve at the pleasure of the President. In time of war or during a national emergency declared by Congress, a service chief may be reappointed for a term of not more than 4 years. Under DOD’s proposal, after the service chief’s initial 4-year term, the President may extend the service chief’s term as he determines necessary, without congressional involvement. A proposal to eliminate statutory 4-year terms of office for officers holding specified senior positions. These positions include the Army’s branch chiefs, deputy and assistant branch chiefs, Judge Advocate General and Assistant Judge Advocate General, Chief of Army Nurse Corps, and Chief of the Army Medical Specialist Corps; the Navy’s Chief of the Bureau of Medicine and Surgery, Chief of the Bureau of Naval Personnel, Chief of Chaplains, Judge Advocate General, and Director of the Nurse Corps or Director of the Medical Service Corps; and the Air Force’s Judge Advocate General and Deputy Judge Advocate General. A proposal to eliminate existing restrictions on the number of terms of the Chairman and Vice Chairman of the Joint Chiefs of Staff. Currently, the Chairman and Vice Chairman are appointed by the President, by and with the advice and consent of the Senate. They serve at the pleasure of the President for a 2-year term and may be reappointed in the same manner for two additional terms, for a total of 6 years. In time of war, there is no limit on the number of reappointments. An officer may not serve as Chairman and Vice Chairman if the combined service exceeds 6 years, except that the President may extend this period to 8 years if he determines such action is in the national interest. This limitation also does not apply in the time of war. Under DOD’s proposal, the President may reappoint the Chairman and Vice Chairman for additional 2-year terms as he determines necessary, without congressional involvement. The provision limiting total combined service as Chairman and Vice Chairman would be eliminated under DOD’s proposal. A proposal to eliminate existing restrictions on the length of terms of the two Assistants to the Chairman of the Joint Chiefs of Staff for National Guard and Reserve Matters. Each Assistant serves at the pleasure of the Chairman for a 2-year term and may be continued in that assignment in the same manner for 1 additional term. In time of war there is no limit on the number of terms. Under DOD’s proposal, no terms would be specified for these two positions. A proposal to permit the President or the Secretary of Defense to laterally reassign general and flag officers in grades O-9 and O-10 to positions at the same grade without congressional approval. Currently, the President may designate positions of importance to carry the grade of O-9 or O-10. An officer assigned to any such position has the grade specified for that position if he is appointed to that grade by the President, by and with the advice and consent of the Senate. If the officer is subsequently reassigned to a position at the same grade, that new assignment must be confirmed by the Senate. Under DOD’s proposal, the President or the Secretary of Defense may reassign such an officer to another position at the same grade without the advice and consent of the Senate. DOD’s proposed change would not apply to positions established by law; appointment of officers to these positions would continue to require the advice and consent of the Senate. One of DOD’s proposals addresses the distribution of officers among the general and flag officer pay grades. A proposal to eliminate a provision limiting the number of active officers who may serve above the pay grade of O-7 to no more than 50 percent of the total number of general and flag officers in a service. Under DOD’s proposal, the military services could have a higher proportion of officers in pay grade O-8 than allowed under existing law. The proposal does not affect existing caps on the percentage of general and flag officers in grades O-9 and O-10. DOD’s fiscal year 2005 legislative proposals represent the latest in a long series of discussions between Congress and DOD concerning general and flag officer management. These discussions, which reflect a history of congressional interest in maintaining oversight and accountability of general and flag officers, have addressed such issues as the appropriate number of general and flag officers to lead the armed forces, their education and qualifications, and their age and experience level. A legislative framework has evolved that shapes the careers of general and flag officers and the management of these officers. The Defense Officer Personnel Management Act of 1980 established key aspects of the current legislative framework. The act codified in Title 10 many of the legislative provisions DOD is seeking to change. Some provisions have roots in earlier legislation such as the Officer Personnel Act of 1947.