Despite the media stories about troops dismayed by overseas service or combat duty in Iraq or Afghanistan, all the services (active duty and reserve) are suffering from the problem of too many people wanting to join, or stay in. This doesn't get much publicity, but it's a very real problem, because the number of people each service can have on the payroll is set by law. If the limit is exceeded, you have to get permission from Congress, and then find the money to pay and maintain the additional troops. It's rare for there to be too many people. But since September 11, 2001, a combination of recession (which always attracts more recruits to the military) and patriotism (which is usually underestimated by the media) has brought in more people than the armed services are allowed to have.
The usual way to deal with this problem is to raise recruiting standards (to get better quality recruits) and cut the number of people you actually let in. But since the military is all volunteer, the majority of troops are careerists who want to stay for 20 or 30 years (and qualify for a pension). That means that only about ten percent of the troops leave each year. If a lot more of them choose to stay in when their current contracts (enlistments of officer obligations) are up, you have to quickly choose between keeping more older people, or cutting sharply the number of new recruits. There's also the problem of big surpluses in some job categories, and shortages in others. Typically, high skill (or risk) positions have shortages while more pleasant jobs have surpluses. Thus you don't have enough pilots or network administrators, and too many supply clerks. The military is pretty good at selecting people for what they are good at, and this makes it difficult to turn surplus supply clerks into pilots. So you have to enlist fewer clerks, and even let some go (by not allowing the lowest performing ones to re-enlist.)
The military wants to keep it's best people, and is still paying cash bonuses, or other favors (choice of assignment), to get key people to re-enlist. For those in surplus categories, only those with the best performance are kept. This has been increasing the quality of the troops over the past two years, but the surpluses are still a problem. The air force, for example, is now only allowing enlisted troops three months to decide if they want to re-enlist. In the past, you had a year, before your contract expired, to make your mind. Before September 11, 2001, only 53 percent of air force enlisted personnel were staying in. Now it's 67 percent.
The Department of Defense expects a booming economy and never-ending war on terror to eventually solve this "problem." But in the meantime, the personnel officers have to keep coming up with more ways to deal with too many troops.