(a) Adjustments
(1) In general
Chapter 19 of title 37, United States Code, is amended by adding at the end the following new section:
1017. Adjustments to amounts of special and incentive pays
(a) Initial increase
Effective on January 1 of the first year that begins after the date of the enactment of the National Defense Authorization Act for Fiscal Year 2027, the Secretary of Defense shall increase the amount of each covered special and incentive pay (rounded to the nearest dollar) for members of the armed forces by the greater of—
the percentage by which the CPI for the base quarter of the preceding year exceeds the CPI for the base quarter preceding the last statutory or administrative increase date for such covered special and incentive pay; and
the percentage by which the average rate of basic pay for members of the armed forces under section 203(a) of this title in effect on such January 1 exceeds the average rate of basic pay for members of the armed forces under such section 203(a) that was in effect on the last statutory or administrative increase date for such covered special and incentive pay.
(b) Recurring increase
Effective on January 1 of the second year that begins after the date of the enactment of the National Defense Authorization Act for Fiscal Year 2027, and each January 1 thereafter, the Secretary of Defense shall increase the amount of each covered special and incentive pay (rounded to the nearest dollar) for members of the armed forces by the greater of—
the percentage by which the CPI for the base quarter of the preceding year exceeds the CPI for the base quarter of the year before the preceding year; and
the percentage by which the rate of basic pay for members of the armed forces under section 203(a) of this title is increased on such January 1 from the rate of basic pay for such members in effect the preceding year.
(c) Relationship to limits of amounts in law
The Secretary shall increase the amount of each covered special and incentive pay in accordance with subsection (a) or (b) notwithstanding any limitation on the maximum amount of such pay specified in any other provision of law.
(d) Definitions
In this section:
The term base quarter for any year is the three-month period ending on September 30 of such year.
The term covered special and incentive pay means—
a bonus, incentive, or special pay payable under chapter 5 of this title; and
the allowance payable under section 427 of this title.
The term CPI means the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the Department of Labor.
The term last statutory or administrative increase date means the date of the most recent adjustment to an amount of pay that—
reflects a revision based on objective economic indicators or an increase to basic pay for members of the armed forces; or
was made by Act of Congress.
(2) Publication of one-time adjustments
Not later than December 31 of the year of the enactment of this Act, the Secretary of Defense shall publish in the Federal Register a table that identifies—
each covered special and incentive pay (as defined in section 1017 of title 37, United States Code, as added by subsection (a) of this section);
the last statutory or administration increase date (as defined in such section 1017) of each such pay;
the amount of increase of such pay after the application of subsection (a) of such section 1017; and
the total amount of such pay after the application of such subsection (a).
(b) Clarification of special and incentive pay authorities for members of reserve components
Section 357 of title 37, United States Code, is amended—
by striking special or incentive pay and inserting bonus, incentive, or special pay ; and
by striking if the Secretary concerned and all that follows and inserting a period.