During a Tuesday hearing regarding the VA OIT’s budget justification, Chairman Matt Rosendale, R-Mont., and ranking member Sheila Cherfilus-McCormick, D-Fla., both questioned how the budget would affect operations. 

Kurt DelBene, the VA’s CIO and assistant secretary for IT, acknowledged that “it is a challenging budget for us,” forcing the agency to “be very focused on where we invest.” Modernization funds, he said, will have to be “judiciously” allocated “against the highest-priority projects” that the agency has. 

DelBene said that the agency’s original budget submission to the Biden administration did not reflect the same reduction to development efforts specifically for technology as the FY25 document ultimately did. 

The FY25 budget in brief, released by the VA, listed the following reductions across OIT:

• Development allocations at $960,000, a 99.2% reduction, or approximately a $125 million decrease. 
• Enhancement funds at $45 million, an 87.7% decrease, previously standing around $363 million.
• Modernization funds for FY25 are $267 million, a 66.5% cut, previously having allocated funds just under $800 million. 

As a result of the clawed-back funds for VA OIT, DelBene said that the agency is going to have to have a “very strict prioritization of the work that we do.” 

“I do think that we will be able to address the critical projects that we need to address in FY25 with this budget,” he added. “I think we’re making some trade-offs, which will not work well if we sustain those over multiple years.”

In response to a question from Cherfilus-McCormick, DeBene pointed to the need for increases in future years “because you can’t just continue to be at a lower level” for these funding allocations. 

DelBene also noted that the department is looking at a decreased budget for replacing technology, such as PCs, which he estimated to cost between $15-$20 million. 

“We will replace PCs less frequently as a result,” DelBene said. “That’s my point, is that we can’t continue to do that every year. But I feel especially with some of the funding we’ve got recently and the fact the fleet has been updated, we can do that for one year and make that through. But we’re going to have to be diligent about it in future years.”

DelBene said his goal is to not allow veteran care to be hampered as a result of budgetary pitfalls.

“There are difficult choices that have to be made across the entire administration so I respect the challenges of making those cuts,” DelBene said.

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“Congress, if you can hear me, please fund the TMF,” federal CIO Clare Martorana said Tuesday during an event co-hosted by Venable LLP and Trend Micro. “It does something really remarkable in our community. You have a board of experts across government that are convened together to really interrogate these proposals.”

Martorana, who also serves as board chair for the TMF, said there’s been a concerted effort to explore ways for agencies to expedite tech projects. The council of chief AI officers has reviewed a plan to accelerate tech deployment within agencies by two years, Martorana said, though there’s nothing concrete to report yet. 

When it comes to work on the technology within agencies, Martorana said establishing governance, managing risk and continuing to innovate are “the three layers of that AI cake…. The risks are significant and we don’t know them all yet. We haven’t identified this whole ecosystem yet.”

Martorana said in an interview with FedScoop after the Tuesday event that she believes that as the Office of Management and Budget and GSA disclose when tech projects across the federal government are in operation, Congress will recognize that the TMF “is a wonderful funding vehicle.” She pointed to the fund assisting with national cybersecurity efforts and improving digital experience online for customers.

“All of the things that we’re using technology to help improve service delivery for the public — safely, seamlessly [and] securely,” she said.

As agencies continue to work toward implementing new tools, Martorana said in a Thursday interview with FedScoop, that CAIO council representatives are focused on establishing an AI-capable infrastructure that has the computing power and resilience to run AI. 

“Some are gonna only be working with generative AI for a really long time and that’s not going  to take a lot of compute power,” Martorana said. “We have a span across our federal agencies.” Larger agencies “taking leaps and bounds” can have a spillover effect on smaller agencies, she added, “giving our federal workforce the opportunity to participate in this technology transformation.”

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In its congressional budget justification for FY 2025, the NRC said it is looking to develop an AI regulatory framework for the nuclear industry, in addition to facilitating the responsible adoption of AI, which includes generative AI. 

Dave McIntyre, an NRC public affairs officer, shared in an email with FedScoop that agency staffers are “preparing a status update to send the Commission this spring outlining next steps to integrate AI across the agency, invest in the necessary IT infrastructure and recruit and train staff in AI skills.”

A different agency spokesperson confirmed in an interview with FedScoop that the NRC has conducted “some limited risk assessments” of generative AI tools that are publicly available to “help us develop our policy statement.” The spokesperson said that the agency plans to continue working with the Cybersecurity and Infrastructure Security Agency and others on risk management, in addition to working on security controls and risk mitigation as NRC implements internal AI tools.

The NRC issued an internal policy on generative AI to its employees last July, but that policy has not been made public, the spokesperson added, noting that the agency is considering whether the technology can be used “as a testbed or sandbox for tools.”

“We are talking about starting with testing use cases without enabling for the entire agency,” they said. “And we would leverage our development and test environments as we develop solutions.”

Basia Sall, deputy director of the NRC’s IT services development and operations division within the agency’s Office of the Chief Information Officer, said in an interview that the agency remains in the early stages of its gen AI experimentation. 

“We see potential for these tools to be more powerful time savers to help make our regulatory reviews more efficient,” she said.

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During a Wednesday event on U.S. investment in R&D, the White House Office of Science and Technology Policy, National Science Foundation and National Science Board discussed findings in The State of U.S. Science and Engineering 2024 report, including the fact that the U.S. spent $806 billion, or 3.5% of its gross domestic product, on R&D in 2021.  

While officials were eager to share R&D successes from the federal government, they also looked to the report to shed light on workforce development needs for STEM-related fields, as well as the need to enhance educational opportunities for domestic students. 

“R&D is how we open the doors so that the future can be better than the past; it’s how we overcome the limitations of today and step into a better tomorrow,” OSTP Director Arati Prabhakar said during the event. “This report and the president’s budget both remind us of the tremendous strengths that we have here in America with our R&D capabilities, and they also start us on this important path to the work ahead.”

President Joe Biden’s fiscal year 2025 budget leans into innovation through R&D efforts: A fact sheet OSTP shared with FedScoop highlights a request for a 36% funding increase (to a reported $900 million) for NSF’s Directorate for Technology Innovation and Partnerships, along with $606 million for the Department of Energy’s Office of Science to “integrate supercomputing, AI and quantum-based technology for developing the next-generation high-performance computing systems.”

“Most of these innovation-intensive industries, of course, grew out of prior federal R&D investments,” Prabhakar said. “If you think about that, that is true in fields that are diverse as artificial intelligence and new medicines and clean energy, so I think it’s a very consistent theme.”

Additionally, OSTP shared in the release that artificial intelligence R&D funds will be spread across federal agencies to further the development of responsible AI, citing a budget request of $729 million for NSF, a 10% increase, including $30 million for a second year of the National AI Research Resource pilot. 

An OSTP spokesperson shared in an email that the FY 2025 budget also includes a reported $32 million request to support the AI talent surge, and pointed to upcoming Office of Management and Budget issuance of AI guidelines for government to both address risks and encourage innovation. 

OMB “will soon issue the first governmentwide policy to mitigate the risks and harness the benefits in the federal government’s own use of AI,” the spokesperson said. “To fully deliver on this mission, we need the right people. President Biden launched an AI talent surge to bring more AI professionals into the Federal government to help us achieve our ambitious AI agenda. … We’re very excited about the talent we’ve brought on to date, and the talent we will bring on to work on high-priority AI projects.”

The spokesperson noted the Presidential Innovation Fellows, the U.S. Digital Corps and the U.S. Digital Service as some of the tech talent programs that have been advancing the goals of the administration where the AI talent search is concerned. 

Still, the country can’t rely solely on those programs, given the fact that occupations requiring STEM knowledge account for 24% of the U.S. workforce, and 19% of all STEM workers were born abroad, per the report. NSB Chair Dan Reed said the flow of domestic talent into the STEM workforce has to increase. The total STEM workforce is around 37 million individuals, a mix of those with at least a bachelor’s and those with technical skills who do not have at least an undergraduate degree. 

Reed acknowledged the value of attracting foreign workers, calling the country “a global magnet for talent. That’s been one of our superpowers, that the best and the brightest on the planet want to study and work here. We have to preserve that, but it’s not a given. They come because they see opportunities; we have to continue to create those opportunities.”

For the domestic workforce, Reed said there is cause for concern, and it starts with education.

The NSB chair referenced the report’s findings of a “sharp decline” in elementary and secondary education mathematics performance, and the fact that women and minorities are underrepresented when it comes to bachelor’s and graduate degrees in science and engineering.

“We have to improve access to higher education as students are to pursue advanced STEM degrees,” Reed said. At the same time, the country “must continue to welcome international students from around the globe and to implement policies that entice [and] enable them to stay and work here after they receive their degrees.”

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The roughly $3 billion requested for AI investments largely reflects the priorities in Biden’s October executive order on the budding technology, which outlined a path forward to harness AI’s power while also creating standards for responsible use. The request would direct some of the biggest sums to agencies like the National Science Foundation, the Department of Energy and the Department of Commerce.

In total, the Biden administration requested $75.1 billion for IT spending across civilian agencies in fiscal 2025, a small uptick from the $74.4 billion it asked for in 2024.

The president’s budget comes a week after Congress avoided a shutdown by passing a package of six appropriations bills for the current fiscal year. Notably, those bills included cuts for agencies like NSF and Commerce’s National Institute of Standards and Technology, which were both given key tasks under Biden’s AI order.

Here are five AI-related takeaways from the request:

1: Research at NSF

The budget includes more than $2 billion in funding for NSF’s research and development in AI and other emerging technology areas, including “advanced manufacturing, advanced wireless, biotechnologies, microelectronics and semiconductors, and quantum information science.” It also includes $30 million to fund a second year of the pilot for the National AI Research Resource, which is designed to improve access to resources needed to conduct AI research. The pilot, which began in January, was required under Biden’s order and bipartisan, bicameral legislation pending in Congress seeks to authorize the full-scale NAIRR.

2: AI cybersecurity at DOE

The budget also includes “$455 million to extend the frontiers of AI for science and technology and to increase AI’s safety, security, and resilience” at DOE. The funding would support efforts “to build foundation models for energy security, national security, and climate resilience as well as tools to evaluate AI capabilities to generate outputs that may represent nuclear, nonproliferation, biological, chemical, critical-infrastructure, and energy security threats or hazards,” according to the document. It would also support the training of researchers.

3: AI guardrails at Commerce

The budget seeks $65 million for Commerce “to safeguard, regulate, and promote AI, including protecting the American public against its societal risks.” Specifically, that funding would support the agency’s work under the AI executive order, such as NIST’s efforts to establish an AI Safety Institute. The recently passed fiscal year 2024 appropriations from Congress included up to $10 million to establish that institute.

4: AI talent surge

The request also seeks funding for the U.S. Digital Service, General Services Administration and Office of Personnel Management “to support the National AI Talent Surge across the Federal Government.” The budget estimated that funding to be $32 million, while the analytical perspectives released by the White House put it at $40 million. Those talent surge efforts were outlined in Biden’s executive order and have so far included establishing a task force to accelerate AI hiring, authorizing direct-hire authority for AI positions, and outlining incentives to maintain and attract AI talent in the federal government. 

5: Supporting chief AI officers

Finally, Biden’s request also provides funding for agencies to establish chief AI officers (CAIOs). According to an analytical perspectives document released by the White House, those investments would total $70 million. Agencies are required to designate a CAIO to promote the use of AI and manage its risks under Biden’s executive order. So far, many of those designees have been agency chief data, technology or information officials. Specifically, the budget mentioned support for CAIOs at the Departments of Treasury and Agriculture, in addition to funding a new AI policy office at the Department of Labor that would be led by its CAIO.

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The $75 million request is a significant decrease from prior budget requests: $200 million for fiscal 2024 — a figure that House appropriators have tried to zero out — and $300 million in fiscal 2023.

In total, the Biden administration requested $75.1 billion for IT spending across civilian agencies in fiscal 2025, a small uptick from the $74.4 billion it asked for in 2024.

“To support IT modernization efforts, the Budget also includes an additional $75 million for the Technology Modernization Fund (TMF), an innovative investment program that gives agencies additional ways to deliver services to the American public quickly,” the budget request reads.

It also highlights the “more than $750 million” the fund has invested in federal IT projects since its inception across 48 investments and 27 agencies (though those numbers are a bit higher as listed on the TMF’s website).

Amid the COVID-19 pandemic, the Biden administration, with Congress’ support, in 2021 issued a $1 billion injection through the American Rescue Plan to drive rapid modernization and close some of the most pressing digital service and cybersecurity gaps across the federal government.

But since then, the General Services Administration and Office of Management and Budget — the two agencies that lead the administration of the fund with its board — have fought an uphill battle to convince lawmakers to meet the Biden administration’s requested levels of funding for the TMF.

Last summer, for instance, the House Appropriations Committee said in a summary of the Financial Services and General Government appropriations bill that issues funding for the TMF that it wants to eliminate funding for the program in fiscal 2024 as part of its efforts to “cut wasteful spending” across the federal government. Congress has yet to pass a Financial Services and General Government appropriations bill for fiscal 2024. On the other side of Congress, the Senate Committee on Appropriations approved language in an earlier version of the appropriations bill for fiscal 2024 that would rescind $290 million allocated to the TMF through the American Rescue Plan.

The TMF’s hang-ups with Congress have largely centered on its repayment mechanism. When created in 2017 under the Modernizing Government Technology Act, recipients of TMF money were required by law to repay those funds within five years. But with the issuance of the $1 billion to the TMF in 2021, the Biden administration also created a “flexible” repayment policy for certain high-priority projects.

House lawmakers wrote a bill late last year to reform the TMF, requiring agencies to adhere to the original intent of the Modernizing Government Technology Act and to extend the fund through 2030, beyond its original sunset of 2025. Though that bill hasn’t been passed, GSA and OMB went ahead and updated the TMF’s repayment policy to reflect a new “consistent repayment floor with a minimum of 50% repayment,” with “rare exceptions” decided by the GSA administrator and OMB director.

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The budget looks to advance the goals laid out in President Biden’s executive order on AI, by outlining approximately $30 million in funds for the National AI Research Resource pilot (NAIRR), $70 million for federal agencies to establish Chief AI Officers (CAIO), $32 million for the AI talent surge and more, according to an email shared by an Office of Management and Budget spokesperson.

“The Budget provides over $3 billion across agencies in order to responsibly develop, test, procure and integrate transformative AI applications across the federal government and supports the implementation of the administration’s executive order,” the spokesperson said. “The Budget also proposes $300 million in mandatory funding to increase agency funding for AI, both to address major risks and to advance its use for public good.”

In total, the Biden administration requested $75.1 billion for IT spending across civilian agencies in fiscal 2025, a small uptick from the $74.4 billion it asked for in 2024.

Significantly, the budget provides $65 million in support of the Department of Commerce’s AI Safety Institute, which is set to create “guidelines, tools, benchmarks and best practices to evaluate and mitigate risks using red-teaming and other methods.” According to the spokesperson, the consortium will include work to identify and mitigate against the creation of “harmful synthetic content” like deepfakes and enable the adoption of privacy-preserving AI. 

The OMB spokesperson shared that the budget seeks to bolster AI and tech talent throughout the government, giving $32 million in funding across the U.S. Digital Service, General Services Administration and Office of Personnel Management to bring AI talent into the public sector and “advancing AI priorities across the federal government.”

“The AI Talent Surge is bringing dedicated people into service to leverage AI to improve government services; make smart policies and regulations around AI to protect people’s rights, safety, and privacy; and further AI research and development (R&D), so that the United States continues to lead the world in cutting-edge AI innovation,” the spokesperson said.

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