Which agencies will Trump eliminate?
I judge it unlikely but plausible that USAID will be fully eliminated as a standalone statutory agency during Trump's term; my independent probability is 22%.
Analysis
**Stage 1 — Blind analysis (ignore market prices):**
*What "eliminated" means for this assessment*: I interpret "eliminated" as the statutory abolition or termination of the United States Agency for International Development as an independent federal agency (its statutory existence and name removed or subsumed so that it no longer exists in its current form) by 20 January 2029. Administrative rejiggering or large budget cuts that leave the agency intact are treated as *not* elimination.
Historically, wholesale elimination of an entrenched federal agency requires congressional legislation and sustained political support. USAID was created and embedded by statute and decades of bipartisan foreign policy practice. That statutory anchor makes complete elimination harder than an executive reorganization. A president can shrink, hollow out, transfer functions administratively, or merge an agency into another department (e.g., move functions into State) to reduce its profile, but full legal abolition without Congress is uncommon.
Arguments that increase probability: - Presidents with strong congressional allies can press for legislative changes; if Trump's allies control both chambers with adequate margins and prioritize dismantling foreign aid institutions, elimination becomes more feasible. - Trump and allies have signaled willingness in previous terms to restructure or subsume USAID; the political appetite in some GOP circles to reduce postwar foreign assistance institutions exists. - Administrative strategies (executive orders, reorganizations, funding controls) can substantially weaken USAID and could lead to de facto elimination even if statutory abolition does not occur, increasing the odds that some version of "elimination" (as many lay traders define it) happens.
Arguments that decrease probability: - Congress, particularly moderates, appropriators, defense hawks, and humanitarian groups, have incentives to preserve USAID. Defense and State officials often rely on USAID on humanitarian missions, disaster response, and stability operations—powerful constituencies to defend it. - Eliminating a visible humanitarian/aid agency during crises (pandemics, wars, disasters) is politically costly and likely to face public and international backlash. - Legal and institutional inertia: many USAID functions are tied to statutory programs and foreign assistance law (e.g., Foreign Assistance Act). Undoing that entirely by 2029 requires time, coordination, and legislative majorities.
Balancing these factors, a cautious point estimate is that complete statutory elimination is unlikely but not impossible — I place the independent probability at 22%.
**Stage 2 — Market calibration (compare independent view to market):**
The market currently prices "Yes" at ~39%. My independent estimate (22%) is meaningfully lower. Possible reasons the market is pricing higher:
- Traders may be conflating *administrative subsumption or severe defunding* with legal elimination. If many market participants interpret a merger into State or effective hollowing-out as "elimination," that raises market-priced probability. - Newsflow and political narratives (headlines about plans to fold USAID into State, repeated presidential rhetoric, budget proposals) can generate spikes in perceived risk even when statutory abolition remains unlikely. The market quickly prices rhetoric; legislation is slower. - Market participants may overweight the probability of strong unified Republican control of Congress and executive willingness to press for abolition. If a tranche of contracts was purchased when congressional prospects seemed favorable, prices can remain elevated even if later obstacles appear. - Liquidity and trader composition: prediction markets sometimes reflect the views of a vocal subgroup (activists, insiders) rather than the full policymaking constraints. A high trade volume (174k contracts) suggests strong attention, but that attention could be directional (speculators betting on dramatic outcomes).
In my view the market is likely overpricing the chance of clean statutory abolition and instead capturing a higher probability of substantial administrative disruption or renaming. If you interpret the question strictly (statutory elimination), I believe the market is biased upward by conflation and rhetorical momentum. If you interpret the question loosely (agency disappears in practice via merger or defunding), the market price is more defensible.
Actionable calibration: if you are using this market to trade, I would view the 39% price as an opportunity to sell Yes (i.e., take No) relative to my 22% view, unless you accept the looser definition of "eliminated."
Arguments
For
- A unified Republican Congress aligned with the President could pass legislation to abolish or merge USAID, especially if party leaders prioritize it.
- Past rhetoric and prior administration attempts to restructure or absorb USAID show a precedent and a roadmap for elimination efforts.
- The White House can substantially weaken the agency via budgets, appointments, and executive reorganizations that make statutory abolition easier politically.
- Some conservative foreign policy and fiscal constituencies favor shrinking or removing traditional aid institutions, providing an ideological base for elimination.
Against
- Statutory abolition requires Congress and faces entrenched institutional resistance from State, Defense, appropriators, and NGOs with bipartisan congressional allies.
- USAID's operational role in humanitarian response, disaster relief, and stability operations creates strong practical incentives to retain it, especially during crises.
- Public and international reputational costs from eliminating a visible aid agency make lawmakers wary of pursuing full abolition.
- Legal and budgetary entanglements (Foreign Assistance Act programs, ongoing contracts/grants) complicate rapid elimination within a single term.
Key drivers
- Congressional composition and will: whether a pro-elimination majority (and veto-proof margin if necessary) exists to pass abolition legislation.
- Administration strategy: whether the President pursues administrative subsumption (merger into State) versus seeking statutory abolition through Congress.
- Geopolitical and humanitarian events: wars, pandemics, natural disasters or other crises that raise demand for U.S. development and humanitarian capacity.
- Stakeholder resistance: strength of pushback from the State Department, military, NGOs, humanitarian groups, bipartisan members of Congress, and foreign partners.
Risk factors
- Definition risk: differing public/trader definitions of "eliminated" (statutory abolition vs. de facto absorption) create forecasting ambiguity.
- Timing and legislative calendar: major bills and restructurings require time; late-term efforts are harder to execute before 20 Jan 2029.
- Political backlash and optics: eliminating a humanitarian aid agency can provoke domestic and international political costs that curtail legislative appetite.
- Unpredictable crises: sudden international or humanitarian crises could rapidly lower elimination odds by demonstrating USAID's operational value.
Scenarios
Best case
For the 'Yes' outcome: The President secures strong, compliant majorities in both chambers; leadership attaches abolition language to must-pass legislation or a budget reconciliation vehicle; extensive administrative coordination and a compact political window enable statutory abolition or legal merger of USAID into State before 20 Jan 2029. Public messaging frames the move as efficiency/reform, and key stakeholders are placated with preserved functions under the State Department.
Most likely
A middling outcome: significant administrative reorganization, budgetary pressure, and reduction in USAID's independence (e.g., functions moved administratively into State, leadership replaced, program cuts) occur, but the agency is not fully abolished by statute. The agency's name or legal status may be altered or its powers curtailed, producing debates and confusion about whether it was "eliminated" depending on definitional choices.
Worst case
For the 'No' outcome: Bipartisan opposition, high-profile humanitarian crises, and resistance from State/Defense and appropriators derail legislative elimination. The White House fails to build the required coalition, and Congress refuses to pass abolition language; instead, USAID remains intact and continues functioning with modest structural changes.
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