The 2009 Defense Authorization Act is now law, and includes a 3.9 percent across-the-board raise in military basic pay, effective on January 1, 2009. That means military members will see the raise in their January 15 paychecks.
In its annual submission to Congress, the Bush administration asked for an across-the-board raise of only 3.4 percent over 2008 basic pay rates. 3.4 percent is the minimum amount that the President could have requested under Federal law. By law, the minimum annual raise in military basic pay is tied to the Department of Labor’s Employment Cost Index (ECI) which tracks changes in pay for all state and local government employees, as well as most private-sector workers.
It's not unusual for Congress to grant a pay raise larger than the administration requests. In fact, in 2008, Congress did exactly that. The Bush 2008 budget proposal asked for a 3.0 raise in military basic pay (the minimum required by the ECI), and Congress included an extra one-half percent when they passed the 2008 Defense Authorization Act, continuing a multi-year practice of military pay raises slightly above the ECI.
On the below chart, the "E" grades (O-1E, O-2E, and O-3E) rates indicate officers who also have more than four years of enlisted or warrant officer service. Such officers are paid at a different rate than officers without at least four years of enlisted or warrant service.
The below chart depicts 2009 monthly basic pay for officers with 20 or fewer years of service: For officers with more than 20 years of service, see this chart.
2009 Proposed Military Basic Pay