How are Congressional pay raises determined?

E-mails often circulate complaining about Congress "voting themselves a raise" and calling for a crackdown on steadily increasing salaries. While it is true that Congress is constitutionally empowered to vote at any time on deciding its own salary, there are other means by which the annual amounts are determined.

Currently, a law is in force that links annual adjustments in Congressional pay to increases in the pay of General Schedule (GS) Federal employees. The Ethics Reform Act of 1989 provided for yearly increases for cost-of-living adjustments based on private-sector wage patterns, but the law also greatly restricted other forms of potential income for Members. Members may not receive a percent increase greater than those received by other Federal employees. The currently scheduled increase for 2005 is 2.5%, although Congress is limited to receiving raises that match only basic GS pay. Federal employees typically receive a combination of basic and locality raises that combine to reflect the yearly salary increase. If the total GS increase is more than 2.5%, Congress only receives the basic increase even if that is less than 2.5%. The pay adjustment is automatic, unless Congress specifically votes against it.