Story highlights Discussions are ongoing regarding these cuts

Massive layoffs at the EPA could have a big impact on military veterans employed by the agency

Washington (CNN) Cuts at the Environmental Protection Agency could be more significant than originally thought, meaning deeper cuts than the up to 25% of the agency's budget that's already been reported, according to a source close to the EPA.

Discussions are ongoing regarding these cuts, which are expected to include grants to states aimed at protecting air, water and land.

The source points out that if there are massive layoffs at the EPA, it could have a big impact on military veterans employed by the agency, since vets are given preferential treatment in the EPA hiring process.

The source also points out a large portion of EPA's budget goes to contractors.

"A lot of small businesses are going to be impacted" if the proposed budget is adopted, the source said.

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