"The U.S. Constitution, in Article I, Section 6, authorizes compensation for Members of Congress 'ascertained by law, and paid out of the Treasury of the United States.' Throughout American history, Congress has relied on three different methods in adjusting salaries for Members. Specific legislation was last used to provide increases in 1990 and 1991. It was the only method used by Congress for many years. The second method, under which annual adjustments took effect automatically unless disapproved by Congress, was established in 1975. From 1975 to 1989, these annual adjustments were based on the rate of annual comparability increases given to the General Schedule federal employees. […]A third method for adjusting Member pay is congressional action pursuant to recommendations from the President, based on the recommendations of the Citizens' Commission on Public Service and Compensation established in the 1989 Ethics Reform Act. Although the Citizens' Commission was to have convened in 1993, it did not and has not met since then. In recent Congresses, bills have been introduced to alter the adjustment procedure, reduce the pay of Members of Congress, extend the current pay freeze, prohibit pay during a government shutdown, and apply any sequester to Member pay. This report contains information on actions taken affecting each pay year since the establishment of the Ethics Reform Act adjustment procedure. It also provides information on other floor action related to pay for Members of Congress."
CRS Report for Congress, 97-615
Federation of American Scientists: http://www.fas.org/sgp/crs/index.html