The federal workforce – excluding the Postal Service – would grow about 1.6 percent from about 2.105 million employees in fiscal 2015 to more than 2.14 in 2016.

The increase is primarily driven by growth at the Veterans Affairs Department because of recent reform legislation and the restoration of jobs at the IRS, according to the budget. The VA would add 11,600 additional employees over the year, and the Treasury Department would boost its staff by 9,400 in fiscal 2016.

But the Defense Department will see a decrease of about 2,900 federal employees in fiscal 2016 – a 0.4 percent decrease over the previous year. Other agencies that see cuts are NASA and the General Services Administration, with about 200 job losses each.

See also: Obama wants to reorganize, merge federal agencies

See also: Obama proposes 1.3 percent federal pay raise for 2016

Agencies also seeing large growth include the Department of Homeland Security, which would gain 3,800 jobs as well as the Health and Human Services Department, which would increase by 2,600 jobs.

But the cuts in the Defense Department will only increase the agency's reliance on costly contractors, said American Federation of Government Employees President J. David Cox.

No proposal to cut the cost of the department's headquarters operations can be taken seriously if it disregards the one segment of the workforce that costs the most," Cox said.

While the National Federation of Federal Employees supports the overall growth in agency staffing levels, cutting the DoD workforce is a bad idea, NFFE President William Dougan said.

"Defense workers are essential to maintaining our military strength, and cutting the workforce will impact our country's ability to maintain its military readiness," Dougan said.

But the union does support the increase in staffing levels at the VA, Dougan said.

"Veterans deserve the best care we can provide them, and increasing VA staff is probably the most important step forward this country could make to accomplish that," he said.

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