President Donald Trump’s $2.2 trillion budget proposal for federal spending in the fiscal year that starts October 1 would add $1.5 trillion in defense spending while further reducing the size of most other federal government departments.
The budget, proposed Friday, would cut the number of staff and resources available to the already slimmer Department of Labor, Department of the Treasury, Internal Revenue Service, Securities and Exchange Commission and Commodity Futures Trading Commission.
According to the Office of Personnel Management, the number of civilian employees in the federal workforce fell by more 271,000 since January 2025. According to the data, the Treasury, Department of Agriculture and Social Security Administration have lost the largest number of workers, at 19,600, 18,400 and 15,800 employees, respectively.
The Trump administration has targeted certain agencies directly that it dislikes or sees as unnecessary, such as the Consumer Financial Protection Bureau, a watchdog created after the 2008 financial crisis by the Dodd-Frank Act to regulate consumer lending. However, budget cuts have also impacted agencies responsible for major initiatives.
For instance, the Treasury Department is overseeing the rollout of the new Trump Accounts, set to launch in July. The Department of Labor recently proposed a significant rule offering a regulatory safe harbor for fiduciaries to include alternative investments in defined contribution plan menus. Meanwhile, the SEC and CFTC, both operating without a full slate of commissioners, are embroiled in a jurisdictional dispute over cryptocurrency regulation, with the future regulation of emerging prediction markets also uncertain.
Despite reduced staffing—what the Trump administration describes as a streamlined approach—these agencies must still advance the administration’s agenda. Democrats have strongly criticized the staff and budget cuts, refusing to support them; the budget for fiscal 2026, the current fiscal year, passed Congress only after the longest government shutdown in history. As a result, partisan divides persist, especially over the administration’s request for a 42% increase in military spending to address issues including the ongoing war in Iran. While it is unclear how the budget debate will play out, and presidential budgets often face opposition in Congress, agency sizes are almost certain to shrink.
Here’s how each agency could be cut, based on the Trump budget for fiscal 2027:
IRS/Treasury
The Treasury Department and IRS budgets for fiscal 2027 would be approximately 12.5% lower than they are for the current fiscal year, with the total funding request coming in at approximately $9.8 billion, down from nearly $11.2 billion in the current year.
The department would have 56,137 full-time employees, down from 65,722—about a 14.58% reduction—with most of the cuts coming from enforcement positions, which would be reduced by approximately 17%.
SEC, CFTC
Additionally, the SEC and CFTC, both operating without a full slate of commissioners, face budget cuts and further staff reductions under the administration’s proposed budget.
The SEC requested a budget of $1.908 billion for the coming year, down 11% from fiscal 2026, but it requested 4,177 full-time employees, up 3.8% from the previous fiscal year. The increase in headcount comes after a larger reduction in staff in 2025 than in previous years.
The SEC had more than 4,500 employees in 2025 and more than 5,000 in 2024, but the agency lost many workers to buyout offers and other reduction-in-force efforts. The agency will “begin hiring in areas that support the administration’s agenda as staff attrit the agency,” the budget proposal stated.
According to information from the Congressional Research Service, while the SEC’s budget is set through the appropriations process, fees on stock and other securities transactions that the SEC collects from securities exchanges offset the appropriations. Annual collections, historically exceed the SEC’s annual appropriations. The SEC’s enacted annual budget for fiscal year 2024 was approximately $2.1 billion.
Meanwhile, the CFTC requested a $410 million budget, a 12.3% increase from the current level. Though the agency has increased its budget request, the latest ask follows a large reduction in 2025, a year when the commission was mostly inactive, since lone Commissioner Michael Selig was not sworn in until December 2025.
The agency would also add 14 full-time employees, bringing it to 650, up from the current 636.
Department of Labor
The Department of Labor’s discretionary budget is proposed to be $10.7 billion in fiscal 2027, a reduction of about 25% from the fiscal 2026 budget, which itself was cut from prior years. In addition, the number of full-time employees the department would fall to 10,740 from 12,988, a 17.3% reduction. The proposal also calls for a $10 million cut to $181 million from $191 million for the Employee Benefits Security Administration. The cuts would essentially achieve the reduction intended in the administration’s original fiscal 2026 budget.
As in last year’s original budget, the administration’s fiscal 2027 spending plan would slash at least $2.4 billion from programs and eliminate the Office of Federal Contract Compliance Programs and Job Corps. It also includes $3.4 billion for creation of a “Make America Skilled Again” program that would consolidate 12 workforce development programs into one.
The budget proposal for the DOL also includes significant cuts for several of its other divisions. The Wage and Hour Division would receive $235 million, a decrease from the current $260 million. The Occupational Safety and Health Administration’s budget would drop to $582 million from $629 million. The proposal also allocates $348 million to the U.S. Mine Safety and Health Administration, representing a reduction of approximately $40 million from the current fiscal year. The changes represent cuts for most of the nation’s key labor and safety regulators.
Tags: budget proposal, CFTC, federal budget, Internal Revenue Service, Securities and Exchange Commission, Treasury Department, United States Department of Labor (DOL)