Last year the Congress discontinued its previously imposed minimum personnel strength limitations on the Army Reserve. Similar restrictions on the strength of the Army National Guard contained in the 1960 Department of Defense Appropriation Act should likewise be dropped. I strongly recommend to the Congress the avoidance of mandatory floors on the size of the reserve components so that we may have the flexibility to make adjustments in keeping with military necessity.

I again proposed a reduction in the Army National Guard and Army Reserve -- from their present strengths of 400000 and 300000, respectively, to 360000 and 270000 by the end of the fiscal year 1961. These strengths are considered adequate to meet the essential roles and missions of the reserves in support of our national security objectives.

- About 30% of the expenditures for the Department of Defense in 1961 are for military personnel costs, including pay for active, reserve, and retired military personnel. These expenditures are estimated to be $12.1 billion, an increase of $187 million over 1960, reflecting additional longevity pay of career personnel, more dependents, an increased number of men drawing proficiency pay, and social security tax increases (effective for the full year in 1961 compared with only 6 months in 1960). Retired pay costs are increased by $94 million in 1961 over 1960, partly because of a substantial increase in the number of retired personnel. These increased costs are partially offset by a decrease of $56 million in expenditures for the reserve forces, largely because of the planned reduction in strength of the Army Reserve components during 1961.