Mr. KILDAY. That was in this bill and in the Cordiner Committee report?

Colonel KECK. That is right.

Mr. KILDAY. I think it is an excellent proposal.

Mr. MILLER. You said in response to a question this is based on the average flow and not an accelerated flow of promotion.

Colonel KECK. That is correct.

Mr. MILLER. How long has it been since we had an average flow of promotions in the armed services?

Colonel KECK. By average, sir, I mean we add up the number of people and their time in grade and take a mathematical average. Mr. MILLER. This is a good theoretical approach to it but we haven't had that type of promotion in the last 14 years, have we?

Colonel KECK. It is the present average I should say. The present flow.

Secretary FRANCIS. Of course, the main thing that makes it difficult to have a stable policy for promotion is the trouble the military is always in of either building up or reducing back. As you build up you

Mr. MILLER. I think you pointed up, Mr. Secretary, the thing I wanted to bring up, that there is no such thing as an average flow of promotion and we are only fooling ourselves if we are going to base something on an average flow of promotion. It has to meet the exigencies of the moment. As defense becomes accelerated, promotion becomes accelerated. When it goes down it will go down and you can't find a formula that is going to meet and solve the problem, can you?

Secretary FRANCIS. That certainly makes it more difficult and it varies, of course, between services. We did take these figures in part from the ages that the men are in today in these various grades plus what you would do in an ideal, stable situation.

Mr. KILDAY. But, of course, we have never provided by law any period of service in any of these grades so when it is possible to have rapid promotion there is no legal prohibition against the rapid promotion?

Colonel KECK. That is right.

The first provision then is the additional grades. The second provision is the step in grade system.

I have several charts that will illustrate this. This merely schematically illustrates the present system where pay reads across in this direction horizontally. Pay overlaps where E-5's, some E-5's make less than some E-4's and some E-6's make less than some E-5's or E-4's. These are based on total cumulative years' service.

The proposed step-in-grade system has no overlap horizontally and personnel will accrue additional pay in grade based on time in grade. Mr. BLANDFORD. Colonel, may I ask at that point, is that not an administrative control factor? In other words, if there is an E-4 who is not pulling his weight, who is drawing more money than an E-5, there is nothing in the law that requires you to reenlist him, is that correct?

Colonel KECK. That is correct.

Mr. BLANDFORD. The same thing with all the other grades?
Colonel KECK. Yes, sir.

Mr. BLANDFORD. Isn't it true most of your overlapping is due to two factors, (1) promotional opportunities being frozen in the next higher grade in that particular field or, (2) the fact that the person involved has reached the maximum of his capabilities.

Colonel KECK. That is correct.

Mr. BLANDFORD. Now, why should that individual who has been placed, through no choice of his own, in a frozen promotion field, suffer by not being allowed to accumulate any additional increments in pay, whereas the other person fortunate enough to go into a scarce field will flow right through? Now, there is where we get into the crux of longevity, versus step in grade.

Colonel KECK. May I defer to another chart that I have which will illustrate that point in particular? It is not this next one, but this also illustrates the step-in-grade system where the lowest pay in any grade is higher than the highest pay in the next lower grade.

In this particular proposal, our promotion increases exceed in-grade increases.

Mr. RIVERS. Where did this idea come from?

Colonel KECK. Civil service, sir, and industry. I believe most other organizations pay on this basis.

Mr. RIVERS. Did it originate with Mr. Cordiner's Committee? Colonel KECK. No, sir; it has been recommended many, many times in the past. I know the Hook Committee had it in their original recommendations.

Mr. KILDAY. It was in the Cordiner Committee report?

Colonel KECK. Yes; it was.

Mr. RIVERS. I thought it originated there.

Colonel KECK. Oh, no, sir, it goes way back. It was in their original. I don't know whether it was in their final report.

Mr. BLANDFORD. It was not in the final presentation of the Hook Committee. It was discussed along with a lot of other proposals.

Colonel KECK. The third of the three main features, the one being the added grades to the step in grade, are new pay rates. They are based on this new structure. I have a series of charts that explain the principal consideration used in determining the new pay rates.

The first is pay for obligated service, which is unchanged. I think this was established in 1955 where for periods of obligated service there was no change made.

The second, as Secretary Francis already pointed out, pay for the top grades has been increased. This establishes a bottom and top level. In that connection, this is a chart showing the comparison of military pay from 1908 to date. In the lower grades it has increased 800 percent whereas in the officer area some of the increases are less than 100 percent (chart 6).

Mr. MILLER. What date does that start with?

Colonel KECK. 1908.

Mr. MILLER. What was the pay of the E-1 in 1908?

Mr. KILDAY. $12.

Mr. MILLER. You are measuring rabbits and mules here.

Colonel KECK. No, sir, because we are using the same dollar value for the officer area.

Mr. WILSON. Does this take in all pay and allowances?

Colonel KECK. Base pay. It includes the 1955 Career Incentive Act increase. (Chart 7.)

The next chart shows again from 1908 to 1955-this, sir, is mixing apples and oranges. This happens to be the pay of an O-6 colonel, The actual dollars he receives during this period. They are not the same dollars, for the chart shows that in this case, the equivalent in 1955 dollars would be this amount.

There is the case in 1957. The point being that the O-6 colonel in 1908 could buy 1,470 loaves of bread whereas the one today can buy only 846.

Mr. MILLER. That applies clear across the economy.

Colonel KECK. The other feature in determining the proper rates of pay, we did research on pay data with the conclusion that we wanted to make our pay comparable with other occupations. If we don't pay our people enough they leave the service.

Mr. KILDAY. Here again there is base pay only. This isn't takehome pay.

Colonel KECK. It is base pay in these instances.

Mr. KILDAY. I believe in two pay bills we placed the major portion of the increase on allowances so as to make it net compensation so that take-home pay would present a different picture.

Colonel KECK. The previous chart, sir, was take-home pay, reflecting the increase in allowances.

Mr. RIVERS. When you say take-home pay, do you mean after taxes have been deducted?

Colonel KECK. I do; yes, sir.

Mr. BLANDFORD. Your figures don't show taxes withheld, do they? Colonel KECK. Yes; they do.

Mr. KILDAY. I assume it is base pay, plus quarters, plus subsistence allowance.

Colonel KECK. Yes, sir; but in the previous chart they included tax deductions.

Mr. MILLER. Did the previous chart include quarters allowance? Colonel KECK. Yes, sir. It is base pay, quarters, and subsistence. It includes a 30-year-service colonel, married, with 2 dependents. The reduction in 1957 has been because of the contribution of social security so that affects actual take home.

Mr. BLANDFORD. It actually does reflect taxes, because his actual take-home pay is closer-he starts out with about 990.

Colonel KECK. That is correct.

Mr. RIVERS. It does reflect, after the reduction of taxes.

Mr. BLANDFORD. And social security.

Colonel KECK. Yes, sir.

Mr. RIVERS. But you don't want to build up the philosophy that they don't have a responsibility to support the Government. That always irritates me when we talk about take-home pay.

Mr. KILDAY. I used the term "take-home pay," and I regret it. I think, hereafter, when we mean base pay we will say base pay, and when other things are included we will use the other term.

Mr. RIVERS. We have a lot of taxes to pay in Congress. That may surprise some people.