June 10 (Bloomberg) -- A shortfall in recruiting is adding pressure on the U.S. military to show progress in Iraq and divert more resources toward enlistment incentives.

With potential recruits opting for civilian jobs in an improving employment market, the Army is expected to report today that it missed its enlistment goal for May by about 25 percent.

This bad news -- the fourth-straight monthly shortfall -- follows a Washington Post-ABC News poll this month that found three-fourths of Americans think casualties in Iraq are unacceptably high and two-thirds believe U.S forces are bogged down.

``We have a chronic problem on our hands, not an acute problem,'' said South Carolina Senator Lindsey Graham, chairman of a Senate subcommittee on military personnel. ``We should assume there are going to be 100,000 troops in Iraq two years from now, and continuing losses. It is time to repackage this war and let Americans know we are fighting for freedom.''

An intensified sales campaign has failed to close the recruitment gap for the Army, the largest branch of the armed services. The Army missed its monthly goal in February for the first time in almost five years and fell short again in March and April. The goal for fiscal 2005 is 80,000 recruits; recruitment through the first seven months was 35,926, less than half that.

The Army maintains its active force of about 490,000 by offering incentives such as bonuses. It's ahead of this year's target for retaining people and is trying to increase its size to about 512,000.

``The challenge is not keeping them in, it's getting them in,'' said Lieutenant Colonel Bryan Hilferty, a spokesman for the Army's chief of personnel.

`Driving Force'

``The Iraq war is the driving force behind the Army's recruiting problem,'' said Charles Pena of the Cato Institute, a Washington-based policy research group. ``Working in the civilian economy doesn't entail the risk of getting blown up by an IED in Iraq,'' said Pena, referring to the roadside bombs and other improvised explosive devices that have been the leading cause of death for U.S. soldiers in Iraq.

As of yesterday, 1,685 U.S. personnel had been killed in Iraq since the U.S.-led invasion on March 19, 2003, according to the Defense Department. There have been 190 U.S. deaths in the war in Afghanistan, where the U.S. has about 18,000 military personnel. It has about 138,000 in Iraq.

The U.S. Army Reserve and the National Guard, which together make up more than 40 percent of the current force in Iraq, have also failed to meet recruiting goals in recent months.

By the end of April, the Reserve was 21 percent short of its year-to-date objective of 9,185 and the Guard 23 percent below its goal of 34,167, according to Pentagon data. Those figures don't include re-enlistments, which have met the Army's targets.

`Challenging Conditions'

``Today's conditions represent the most challenging conditions we have seen in recruiting in my 33 years in this uniform,'' Michael D. Rochelle, the Army major general who heads the Army's recruiting program, said at a May 20 press briefing.

``Very low unemployment'' -- a rate of 5.1 percent last month, according to labor department figures -- and ``the first time that the all-volunteer force has been challenged in sustained land combat'' are among the top reasons for the shortfall, said Rochelle.

The Army will today report that enlistments last month totaled about 5,000 or about 25 percent short of the goal of 6,700, a Defense Department official said. Enlistments would have fallen about 38 percent short had the target not been lowered, the official said.

Cautious Optimism

The Pentagon's Hilferty said the Army is ``cautiously optimistic'' that it will meet its 80,000-person target, since enlistments tend to pick up in the summer months. The Army is adding recruiters, teaming them with Iraq war veterans and offering potential enlistees bonuses of as much as $20,000 for four years of service.

The military also is buying more ads on Spanish-language television and radio and Web sites, according to the Army. The Army uses black Hummer sport utility vehicles, the civilian version of the Humvee, to play ``hip-hop'' music in urban neighborhoods to attract the attention of young people. It also sponsors a NASCAR team.

``There are a variety of things we can do that cost money,'' Graham said. Increased benefits, a ``more aggressive bonus plan,'' more troops for more frequent rotations, and other incentives are among the policies that might help attract recruits and keep people from leaving the armed services, he said.

Health-Care for the Guard

Establishing health-care benefits for the Guard would cost $3.8 billion over five years and absorb about 0.5 percent of the defense budget, according to Graham.

The National Guard last year increased the bonus for first- time enlistees to $10,000 from $6,000, and to $15,000 from $5,000 for those who make a new six-year commitment to serve.

Without the Pentagon's ``stop-loss'' program, a short-term policy that prevents troops from leaving at the end of their service, the troop-strength situation would surely be worse.

``Stop-loss masks the recruiting problem,'' Pena said. ``We are talking about thousands -- if not tens of thousands -- of troops who are being held past their release date,'' he said.

Potential recruits are being dissuaded from joining the Army by parents and teachers. ``We now have very, very low propensity to enlist, both on the part of our young Americans and likewise on the part of influencers'' such as parents and coaches whose opinions change youth attitudes, Rochelle said.

The Marine Corps has missed some monthly recruiting targets this year, but by smaller margins than the Army, Guard and Reserves. Overall, the Marines are slightly ahead of target for sending recruits to basic training year-to-date, U.S. Marine Major David Griesmer said.

Army recruiters are under intense pressure and some have been accused of violating rules to meet quotas. The Army Recruiting Command on May 20 stopped recruiting for one day in a ``values stand-down'' to review its policies and procedures. Weeks earlier, an Army recruiter encouraged a Colorado high school student to forge a diploma and conceal drug use by taking nutritional supplements.

To contact the reporter on this story: Jeff St.Onge in Washington at jstonge@bloomberg.net.

Last Updated: June 10, 2005 00:12 EDT