TL;DR
- "Big government" can mean three different things: how much it spends, how many people it employs, and who gets to make the decisions. Voters often argue past each other because they mean different ones.
- The Congressional Budget Office projects a $1.9 trillion deficit this year, and interest on the debt alone is on track to double from $1.0 trillion to $2.1 trillion by 2036.
- The federal workforce shrank sharply in 2025. GAO counts about 378,000 separations at 22 major agencies, with roughly 127,000 new hires — a net drop of more than 11% at those agencies.
- In February, the Supreme Court ruled 6–3 that the president can't impose tariffs under an emergency-powers law, a fresh reminder that Congress holds the power of the purse.
- A record 62% of Americans said the federal government has too much power last fall, according to Gallup — but Democrats and Republicans reached that view from opposite directions.
- Congress just pushed major spending decisions until after the election, so the people you vote for will write the next chapter.
- The same "who decides?" question is playing out in your investment accounts, through proxy voting. The SEC just proposed a major change to it.
Most of us only notice Washington when it touches something we need
Maybe it's a Social Security appointment you had to wait weeks for. Or a tax question that went unanswered. Or a news alert about another possible shutdown. For most of us, the federal government stays in the background until it doesn't.
That's part of why the "size and power of government" debate can feel abstract, and why it's worth slowing down to ask what people actually mean. Here are three separate questions hiding inside one big phrase.
Question 1: How much does it spend?
The Congressional Budget Office (CBO), Congress's nonpartisan number-cruncher, projects that federal spending this year will total $7.4 trillion, or 23.3% of the economy. Revenue is projected at about 17.5% of the economy. The gap is the deficit: $1.9 trillion this year, or 5.8% of GDP, compared with a 50-year average of 3.8%.
Think of it like a household that brings in $175 for every $233 it spends, and covers the difference by borrowing. Federal debt held by the public is projected to grow from 101% of the economy this year to 120% in 2036, which would pass the previous record set right after World War II.
What's driving the growth? The CBO points to Social Security, Medicare, and interest payments. Interest is the fastest-growing piece, projected to rise from $1.0 trillion to $2.1 trillion over the next decade — already surpassing what the government spends on national defense. For anyone counting on retirement benefits, one more figure matters: the 2026 Social Security Trustees Report projects that the OASI retirement trust fund will run short of reserves in the fourth quarter of 2032 — at which point it could still pay 78% of scheduled benefits, but full payments would need Congress to act before then.
Recent policy has pulled the numbers in different directions. The CBO estimates that the 2025 tax-and-spending law added about $4.7 trillion to projected deficits, while higher tariffs were originally projected to reduce them by about $3.0 trillion. One caveat: after the Supreme Court's tariff ruling (detailed below), the CBO revised that estimate, saying deficits are now roughly $2.0 trillion larger over the coming decade than its February outlook assumed.
Question 2: How many people does it employ?
This one changed dramatically in a single year. According to GAO, nearly 378,000 employees separated from 22 major agencies during 2025 while about 127,000 were hired. Overall, those agencies were down roughly 256,000 employees — more than 11% — between December 2024 and January 2026, with 18 of the 22 agencies shrinking by more than 10% and several by more than 30% (the Department of Education lost over 45% of its staff).
Supporters of the cuts point to estimated taxpayer savings — the Cato Institute has put the figure at roughly $41 billion a year, a little over 2% of the deficit. Critics, including GAO itself, note that new hires don't automatically replace lost expertise or restore an agency's ability to do its job. Which one feels true probably depends on whether you've had to wait on hold with a federal agency lately.
Question 3: Who gets to decide?
This may be the most important question of the three, and it's the one where recent news is most striking.
In February, the Supreme Court ruled 6–3 in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act doesn't authorize the president to impose tariffs. Chief Justice Roberts's opinion held that because tariffs are a form of taxation, and the Constitution gives that power to Congress, the president needed clear congressional authorization he didn't have. The ruling was a reminder that the branches of government are meant to keep each other in check, regardless of which party holds the White House. It wasn't the end of the story, though: the administration has continued pursuing tariffs under other trade authorities not affected by the ruling.
Power also moves between levels of government. Under the One Big Beautiful Bill Act, the federal share of SNAP's administrative costs is set to drop from 50% to 25% starting in fiscal year 2027, shifting more of that load onto states.
How do Americans feel about all this?
Here's a twist that surprises people. In Gallup's most recent reading, a record 62% said the federal government has too much power, the highest in its trend since 2002. But the partisan split flipped: the share of Democrats saying so jumped from 25% to 66%, while Republicans slipped from 75% to 58% — the first time since the mid-2000s that Democrats have been more concerned about government power than Republicans.
And while most Americans have long feared "big government," Gallup also found a near-record 37% now say "big business" is the bigger long-term threat to the country, up from 26% in 2016 — with independents and Democrats driving the shift.
What this suggests is that many people aren't really arguing for "more" or "less" government. They want a government that's accountable, and that shows up when they need it.
Why this is on your November ballot
Congress writes the budget, and this fall its work is unfinished. Lawmakers passed a stopgap bill that funds the government through December 11, buying time for final spending decisions until after the midterms. It passed with wide bipartisan margins — 90–6 in the Senate and 370–48 in the House — after a record 43-day shutdown last fall and a separate 76-day standoff over Homeland Security funding.
Where the two parties are already at odds on spending itself: Republicans are pushing for increased defense spending while cutting most non-defense programs; Democrats call that approach a non-starter and want defense and domestic programs funded on equal footing. That fight is still unresolved heading into the December deadline, and whoever is elected in November will help settle it.
What Republicans are emphasizing: The party's message centers on the workforce and spending cuts already made — arguing that a leaner federal government, achieved through the reductions described above, is overdue and saves taxpayer money. On tariffs, the administration has continued pursuing other legal paths to keep them in place after the Supreme Court ruling, arguing they help offset the deficit and support domestic manufacturing. On SNAP's cost shift to states specifically, Republican leaders have defended it as part of broader efforts to hold states accountable for administering the program accurately.
What Democrats are emphasizing: Congressional Democrats have focused on the scale of the workforce cuts and the SNAP cost-shift to states as evidence of reduced government capacity to serve people, and several have introduced bills to reverse pieces of it — for instance, a Senate bill from Sen. Ben Ray Luján, co-sponsored by 46 other senators, that would repeal the SNAP-related provisions in the 2025 law entirely. On the deficit, Democrats have generally argued that the 2025 tax cuts — which the CBO estimates added $4.7 trillion to projected deficits — are the bigger driver of the debt trajectory than spending on federal staff or benefit programs.
Where there's overlap: Both parties supported the stopgap funding bill to avoid another shutdown before the election, and neither party disputes the CBO's basic numbers on the deficit and interest costs — the disagreement is over what's causing them and what to cut or raise to fix it.
A few plain questions may be more revealing than any slogan when you're weighing candidates:
- How does the candidate plan to handle the deficit and rising interest costs, and what specifically would they protect or trim?
- Does the candidate support the current SNAP cost-share shift to states, or would they push to reverse it?
- How would the candidate keep the government funded past December 11 without another shutdown?
Your investments have a "government size" question of their own
Here's a connection you might not expect, and it ties directly to your money.
If you own stock, whether directly or through a 401(k), IRA, or index fund, you own a small piece of companies that hold annual shareholder meetings. Shareholders get to vote on things like board members and executive pay. Those votes are called proxy votes, and most of us never cast them ourselves — fund managers vote for us, often guided by research from "proxy advisors." Two firms, ISS and Glass Lewis, dominate that market.
Washington is now reshaping this world, which is another version of the "who decides?" question.
December 11, 2025: An executive order directed the SEC, FTC, and Labor Department to increase oversight of proxy advisors, stating that investor returns should be the priority in advising investors.
September 16, 2026: The SEC proposed to rescind Rule 14a-8, the rule that has let shareholders put proposals on company ballots since 1942. The agency's reasoning is that the rule exceeds its statutory authority and intrudes on matters of state law; rescinding it would leave these questions to state law and company governing documents.
Notice the twist: one action adds federal oversight of proxy advisors, while the other steps back from federal rules on shareholder proposals. This isn't a simple story of bigger or smaller government — it's a story of who has a say, and at which level of government.
Some important details: the proposal doesn't change anything today. It must go through public comment first — the comment period runs 60 days after publication — and it's not expected to be finalized in time for the 2027 proxy season.
For everyday investors, a few practical takeaways:
- Ask how your funds vote. Fund companies publish their voting policies, and some now offer ways for investors to weigh in.
- Ask your advisor how proxy voting fits your goals and values.
- Know the comment window. Federal rule proposals invite public comment, so your voice can be heard on this one too.
The takeaway
"How big should the federal government be?" sounds like a single question, but it's really several. How much should it spend and borrow? How many people should it employ? And who gets to make which decisions — Congress, the president, the courts, the states, or you as a voter and an investor?
You don't need to be an economist or a politician to weigh in. You just need to notice where these decisions touch your life, from your paycheck to your retirement account to the services you count on, and ask candidates how they'd handle them. In November, you get one of the clearest chances to have your say.
