President Trump’s budget plan would raise basic pay 7% in January for junior enlisted troops in pay grades E-1 through E-5, and the House has passed a defense bill that includes it. The Senate’s version offers a flat 3.6% to everyone. The two chambers have not settled the difference, and neither number is law.
What the House passed and the White House asked for
The House passed H.R. 8800, the fiscal 2027 National Defense Authorization Act, 216-212 in July, MOAA reports. The military officers’ association says the bill raises pay 7% for E-1 through E-5, 6% for E-6 through O-3 and 5% for O-4 and above. That mirrors the raise the White House proposed in its fiscal 2027 budget. The bill was received in the Senate on September 14.
A Congressional Research Service review puts the request at $5.8 billion for a 7-6-5 percent targeted raise effective January 1, 2027. The Defense Department says the plan averages 6.2% across the force. The largest percentage goes to the most junior service members, which is why the plan is described as targeted.
Here is what the gap means in dollars. On every $1,000 of monthly basic pay, a 7% raise adds $70 a month and the Senate’s 3.6% adds $36. For illustration, a service member drawing $3,000 a month in basic pay would see $210 more under the House tiers and $108 more under the Senate bill, a difference of $102 a month, or $1,224 a year.
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The House tiers beat the Senate figure in every grade. Even the 5% for O-4 and above tops 3.6%, adding $50 per $1,000 of monthly basic pay. The question for each service member is simply which grade bracket applies, because every bracket in the House bill comes out ahead of the Senate flat rate.
Why the Senate settled on 3.6%
S. 4784, the Senate Armed Services Committee’s version, was reported out of committee on June 15 and has not received a floor vote, MOAA says. It provides an across-the-board raise of 3.6%. That figure comes from the formula in federal law that ties the yearly military raise to the Employment Cost Index, the Labor Department’s measure of private-sector wage growth.
Title 37 of the U.S. Code makes the adjustment effective each January 1. It also lets the president propose a different adjustment if national emergency or serious economic conditions make the formula inappropriate. The president must send Congress a plan explaining the reasons and the effect on recruiting and retention.
MOAA says the president’s August letter to Congress specified 3.6% only for the Public Health Service Commissioned Corps and the NOAA Commissioned Officer Corps, which are far smaller than the armed forces. It adds that any law Congress passes setting the raise would supersede the formula.
Pay comparisons are part of the debate. The Congressional Research Service notes that the Defense Department’s 2025 Fourteenth Quadrennial Review of Military Compensation found military compensation “more than adequate” relative to civilian pay. It also called basic pay “a blunt and costly instrument” best used for system-wide recruiting and retention problems.
How 7% compares with recent raises
MOAA lists the last two raises for comparison. In 2025 pay rose 4.5% across the board on January 1, and E-1 through E-4 received an additional 10% on April 1. E-5s with under 10 years of service received an additional 7% on April 1. In 2026 the across-the-board raise was 3.8%, effective January 1.
For E-5 and below, a 7% January raise would top both the 4.5% of 2025 and the 3.8% of 2026. The Senate’s 3.6% would be lower than either of those across-the-board figures. That is the choice facing negotiators, and it falls most heavily on the junior ranks that the House plan favors.
What happens when negotiators meet
MOAA reports that negotiations on the final defense bill will begin in earnest after the election. The group expects talks to produce a 2027 raise between the House and Senate figures, though it says the final number remains unclear. Until a final bill is signed, both the 7-6-5 tiers and the 3.6% are proposals.
House Republicans describe the passed bill as a pay raise of 5 to 7 percent. In the House Republican release, Armed Services Committee Chairman Mike Rogers, an Alabama Republican, called it “a strong bill that builds on President Trump’s Peace Through Strength agenda.” The release gives no vote count or effective date.
MOAA says its priority is keeping military pay in line with private-sector wages under the existing formula. The group supports going beyond the formula when needed for readiness and retention, and it has long backed raises above the index to close the gap left when raises fell below it in 2014 through 2016.
Households that count on a military paycheck have a date to plan around, January 1, and a range to plan within, 3.6% to 7% for the junior grades. What they do not have is a final number. The open question is where the negotiators land between the House tiers and the Senate’s flat rate once the election is over.
What will the January paycheck be, 3.6% or 7%?
A raise that lands anywhere from 3.6% to 7% moves household income by hundreds of dollars a year, and income is the line that most benefit programs test against. A military family that budgets on the wrong figure can miss both ways: spending a raise that does not arrive, or overlooking a program because a number looked too high.
The Benefits Checklist is not a pay tool, and eligibility stays with each program. It scans eleven benefit programs, including SNAP, heating help, property-tax breaks and veterans pensions, with the 2026 income limits, a 50-state phone directory and a printable tracker that comes with the download. It gives a family a written place to compare its income against those limits once the final raise is known.
Get the 2026 income limits for eleven benefit programs in the Benefits Checklist →
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This article was produced with AI assistance and edited for accuracy against the sources linked above.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
