The Budget Deficit, AI, and Measuring Progress

By Paul Steidler: This week Congress again wrestles with avoiding a government shutdown as the Congressional Budget Office projects the Fiscal Year 2025 federal deficit will hit $1.9 trillion.

There has been much discussion about how Artificial Intelligence (AI) can reduce government costs, improve government efficiency, and promote economic growth, all of which can help reduce the deficit. Those discussions need to be accelerated and amped up. Tangible real-world successes need to be promptly documented and shared across federal agencies and with the American public.

Following a June 2024 roundtable, the House Budget Committee said, “AI could also be used within the Federal Government to revolutionize audits, catch improper payments, streamline entitlements, and bolster national security. The technology is currently being used in more than 700 instances in the federal government.”

Senator Mike Rounds (R-SD), one of four members of the Senate’s AI working group, has said, “I firmly believe that AI has the potential to change every aspect of cancer care as we know it.” This means significantly lower federal healthcare costs because of far fewer prolonged illnesses.

What the federal government is lacking, though, is documentation about what AI practices work and should be emulated across federal agencies. As a first step, the President should issue an executive order asking each Cabinet department to identify and report on two significant ways in which AI has, or in the coming six months will, reduce costs and improve efficiencies. The findings should be due September 30, 2025, the end of the fiscal year.

AI documented efficiencies and cost reductions will be rooted in mathematics and science. These are savings that everyone should be able to agree upon.

The opportunities are huge. In April 2024, the U.S. Government Accountability Office reported that the federal government loses $233 billion to $521 billion annually due to fraud alone.

And while curtailing fraud, making government more operationally efficient, and the economic growth and healthcare cost reductions from AI alone may not cure America’s daunting fiscal woes, it will make a significant contribution.