"The phrase 'military pay raise,' frequently used in discussions of military compensation, is almost always a reference to the annual increase in basic pay for members of the uniformed services. By law, basic pay is automatically increased at the start of each calendar year by an amount linked to the change in the Employment Cost Index (ECI), although the President or Congress may override this statutory adjustment. [...] The FY2018 President's Budget requested a 2.1% increase in basic pay, lower than the statutory formula of 2.4%. This was in keeping with the Department of Defense plan to limit increases in basic pay through FY2020. On August 31, 2017, President Trump sent a letter to congressional leaders invoking his authority under 37 U.S.C. 1009(e) to set the pay raise at 2.1%."
CRS In Focus, IF10260
Federation of American Scientists: http://www.fas.org/sgp/crs/index.html