Use of Buyouts at DoD Expected to Continue

The Defense Department, one of the handful of agencies that still has authority to offer its employees buyout payments of up to $25,000 pre-tax as an incentive to resign or retire, would continue to use that authority in the years ahead even though the overall reductions in the DoD work force are near an end, the Congressional Budget Office has said. Currently, DoD has authority to offer buyouts through September 30, 2003; the pending Senate DoD authorization bill would extend that authority by three years. In an analysis of that bill, CBO projected that about 16,500 employees in those three years. While DoD is not cutting employment at the rate it did through the ’90s, it has indicated it would like to use buyouts to address the skills imbalances it is suffering in the wake of those cutbacks.