Your typical enlisted grunt in the military is arguably underpaid. Your typical officer could be making as much or more money in the private sector. The US military is far from immune to the laws of supply and demand and labor economics. A decade of war has changed the math for enlisting in the reserves; when I was in high school and college there was a chance reservists would be deployed. Following the Iraq invasion, it’s pretty much guaranteed.
The areas they might be able to cut costs would be hazard pay and civilian contractors. I know of plenty of cases where someone leaves the military and basically gets rehired to do the same job as a contractor for way more money. But military contracts tend to be very political things with a lot of pork involved. Can you imagine a San Diego representative arguing that we need to scale back military spending?
A true fiscal conservative might argue the solution is to end our occupation of Iraq, along with closing outdated bases in Germany and Japan, and potentially other countries. Scale back demand for soldiers and you’ll have the double benefit of not having to pay quite as much and being able to have a higher average overall quality.