Considering a Cadre Augmented Army - RAND Corporation

-102- A Budgetary Analysis of Cadre
active heavy division in Europe. 124 DoD (1990) estimated the cost of a RC combat (combat
support) division relative to an AC division to be 26 percent (25 percent). 125 CBO (1992)
estimated the cost of a heavy Army National Guard division relative to a heavy active
division to be 25 percent. 126 Palmer et al (1992) estimated the relative cost of RC/AC heavy
and light divisions at 23 and 25 percent respectively. 127 Since Jaffe (2006) provides the most
recent estimate, we chose to use this estimate. 128
Assuming the cost of an RC BCT relative to an AC BCT in peacetime is 28 percent,
we can calculate the average long-run and peacetime annual cost of an RC BCT. In Section
A.2.1, we calculated the annual cost of an AC BCT to be $1.08 billion. Therefore, the
peacetime annual cost of a RC BCT is $302 million (0.28*$1.08 billion). If we assume that
wars occur 33 percent of the time, then we find that an RC unit costs 32 percent of an AC
unit averaged over periods of peace and war. Under these assumptions, the average long-run
cost of an RC BCT is $346 million. This is an average of the peacetime cost ($302 million)
and the wartime cost ($432 million) of an RC BCT when wars occur 33 percent of the time.
In Chapter Two, we used these cost estimates for an RC unit to calculate the average
long-run and peacetime cost savings from trading nine RC BCTs for three cadre BCTs. In
Section A.2.1, we calculated the annual average long-run cost of a cadre unit to be $443
million and the peacetime cost of a cadre unit to be $216 million per year. When wars occur
33 percent of the time, trading nine RC BCTs (9*$346 million) for three cadre BCTs (3*$443
million) would reduce average long-run costs by about $1.8 billion annually. In peacetime,
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124 Reischauer (1990), p. 31
125 DoD (1990), p. 41
126 CBO (1992), p. 7
127 Palmer et al (1992)
128 It is also based on data provided by the U.S. Army.