AI & Government

How federal agencies are funded

The United States’ federal agencies, including the Department of Defense (DoD), are funded through a methodical appropriations process that involves several important phases. It begins with the President’s budget proposal, presented to Congress, which outlines anticipated expenses for various government agencies. Congress then examines this proposal, establishes general spending limitations through budget resolutions, and allocates specific amounts through appropriations bills.

The funding system starts with the President’s Office of Management and Budget (OMB), which generates a comprehensive budget request based on data from federal agencies. Following the budget proposal, Congress creates a budget resolution that determines the overall discretionary expenditure level. Appropriations committees then divide the total budgets among several subcommittees, which subsequently distribute funds to specific agencies and initiatives. For appropriations bills to become law, they must be approved by both chambers of Congress and signed by the President.

Inside the DoD — the PPBE and POM cycle

In terms of funding, the DoD employs a structured procedure known as the Planning, Programming, Budgeting, and Execution (PPBE) system. A critical component is the Program Objective Memorandum (POM) cycle, which significantly influences how funds are requested and allocated within the DoD. Each military service — Army, Navy, and Air Force — submits its POM to the Office of the Secretary of Defense (OSD) by July 30. The POM outlines how each service intends to allocate resources over a five-year period in alignment with strategic guidance from the Defense Planning Guidance (DPG) and Service Program Guidance (SPG).

After submission, program review teams assess each POM. These teams include members from various military departments and defense agencies, and their findings are presented to the Senior Level Review Group (SLRG), which discusses potential adjustments before recommendations are made to the Secretary of Defense. The outcomes culminate in Program Decision Memoranda (PDMs) or Resource Management Decisions (RMDs), which dictate how resources will be allocated for the upcoming fiscal year.

Subordinate departments within the DoD submit budgets through a systematic approach that includes a Budget Estimate Submission (BES). Alongside the POM, each service files a BES outlining funding requirements for the first year of the Future Years Defense Program (FYDP) — personnel, operations, maintenance, procurement, and research and development. Before the final budget request is sent to Congress, the Under Secretary of Defense (Comptroller) reviews the BES to ensure proposed budgets align with overall departmental priorities and fiscal constraints.

The culture of overspending

While there are many reasons why the DoD has such a large budget, the main factor is because they can. There is currently a culture of overspending. Some of the most costly contracts are IDIQ contracts (Indefinite Delivery, Indefinite Quantity), where there are open-ended funding streams to qualified contractors. While some of these contracts deploy legacy weapon systems to foreign countries, many more may need to be optimized for the greater benefit of the taxpayer.

While there is a need to reassess our posture in the world, the most beneficial way forward is to provide NATO countries and our other democratic friends with a transition plan for their own regional security. If European countries have enough money to send to the United States to affect our immigration and politics, then they have enough money to provide their own military and security. When George and Alex Soros purchase over 250 radio stations a few months before a presidential election, Europe is not taxing those individuals enough. (Source: Yahoo Finance.)

AI as the most significant technological revolution in history

Artificial Intelligence is poised to become the most significant technological revolution in history. AI is limitless in its potential to solve humanity’s problems while at the same time being limitless in causing them. We need competent, ethical, and moral people leading the effort to implement AI into our society so we can provide the society we hope to leave to our children. Similar to the Industrial Revolution, AI can change our society and bring more abundance than we have ever known. It is imperative that we allow the United States to be an incubator of innovation in AI.

The Chief Digital and Artificial Intelligence Office (CDAO) is the organization within the Pentagon currently spearheading the DoD AI effort. While they list “Beating Bureaucracy” as a pillar of their mission, they do not detail specifics on how they will accomplish it.

How to integrate AI into the federal government

1. Implement AI into government:
   • Standardize quality data in common administrative roles — Security, Intelligence, Contracting, Procurement, Engineering, Logistics, Operations & Maintenance, and Finance.
   • Digitize records and request processes.
2. Train civilians in AI management— using LLMs, deploying LLMs on unique networks, and training people in using and applying unique AI models. If DOGE anticipates optimization or a Reduction in Force / Schedule F of the DoD, ensure the DoD is well on its way to implementing AI into administrative and operational functions.

Changing the culture

Many bureaucracies in the federal government can be optimized. The first way to overcome inefficient processes is to change the current culture in the DoD — optimization, AI implementation, and efficiencies must be requirement-based objectives within each branch of service. There must be a fiscal transition plan each year that implements or substantially reduces bureaucratic processes.

Changing the culture requires a systematic approach to cost-cutting while maintaining operational readiness. To achieve this, AI management training should be implemented for the right people within the civilian workforce, in concert with an agency-wide change standardizing records. That combination will de-compartmentalize these organizations, provide transparency to the right people, and substantially reduce cost when AI is implemented at scale.