What's the most important thing the military should do while going through this downsizing period?

It seems simple, but if the Army wants to downsize, let's ask for volunteers first.  Get all the "FTA" Privates and Specialists out voluntarily.  This frees up more flexibility to allow experienced and valuable Soldiers to stay in the Army.  Yes, we must take a hard look at everyone, but those with experience, a good behavioral record, and a true desire to make the Army a career should be retained. 

If we also cut down on initial enlistment, it would also free up more flexibility to retain quality Soldiers.  It makes little sense to keep bringing in new Soldiers who need to be trained rather than retain experienced Soldiers.

We have lots of Wounded Warriors who still want to serve.  Perhaps they can be utilized in posts that can be vacated by civilian contractors.  Perhaps I.T. and other administrative roles could be made available to these Soldiers (based on their capabilities).  This would go a long way towards maintaining morale and perhaps cutting some costs.

Cut DFACs.  At Fort Campbell, a brand new DFAC was built out at the Gate 10 Aviation barracks.  Since these barracks and DFAC are on the opposite side of the post from where most of these Soldiers work, no one was using the DFAC.  The DFAC was shut down and everyone was given BAS, but the building stood empty.  Closer to Campbell AAF, the Son DFAC was closed most of the time I was stationed at Fort Campbell.  Upon investigation, I was told that it was being refurbished.  Once it was completed, the cost to operate it was higher than giving BAS to the Aviation Soldiers who lived close by.  At the Fort Campbell NCOA DFAC, Soldiers attending WLC are forced to eat there for two meals per day because the NCOA CSM wanted to keep "his" DFAC.  Most of the Soldiers who attend the NCOA live on post or in the nearby area.  That is an ongoing and wasteful expense.