Which agencies will Trump eliminate?
I assess a modest chance that USAID will be formally eliminated during Trump's term — likely it will be sharply weakened or have functions moved, but complete statutory abolition is unlikely. My independent probability for 'Yes' is 28%.
Analysis
**BLIND ANALYSIS (ignore market prices)**
Based strictly on the facts presented and historical patterns, I judge the probability that USAID will be *formally eliminated* by 2029-01-20 to be materially below even odds. There are clear precedents in this administration for aggressive dismantling of agencies (e.g., moves targeting the Department of Education and the U.S. Agency for Global Media), and the administration has used executive actions and reorganizations to strip agencies of functions. Those facts increase the chance of a major structural change to USAID.
However, USAID differs from some domestic agencies in important ways. It is enshrined in statute (created in 1961), tied to national security and foreign policy implementation, and has broad bipartisan constituencies (defense, development, humanitarian NGOs, some congressional committees). Formal elimination on a relatively tight timeline faces legal, budgetary, and political obstacles. The administration can, and is more likely to, achieve most of its goals through budget cuts, function transfers to the State Department, rebranding, or administrative consolidation — outcomes which stop short of *formal* abolition. For the event’s binary definition, those partial outcomes count as "No."
Quantitatively weighing these forces, I estimate roughly a 28% chance of formal elimination. This reflects: a nontrivial executive appetite to abolish agencies (raises baseline), the existence of precedents in this term (raises baseline), but also structural resistance from Congress, national-security imperatives, and international ramifications (lowers baseline considerably). The timespan (until Jan 20, 2029) allows several years for an aggressive push, but not an open-ended window.
**Arguments for my 28%**: The administration has demonstrated willingness to abolish agencies and reassign functions; reorganization can be implemented administratively if Congress is compliant or passive; strong internal political incentives exist to show decisive action on 'shrinking government.'
**Arguments lowering the probability**: formal statutory abolitions are harder than administrative dismantling; USAID's role in crisis response and defense partnerships makes rapid, visible abolition costly; Congress — even if aligned with the President — has incentives to protect appropriations or force compromises.
**MARKET CALIBRATION (compare to current prices)**
The market currently prices YES at 39% and NO at 61%. My independent probability (28%) is substantially lower than the market's YES price. Possible reasons the market is tilted toward higher YES probability:
- Traders are extrapolating from high-profile, recent abolitions (like the U.S. Agency for Global Media) and assuming the same playbook will be applied broadly; that extrapolation may overweight precedent and underweight legal/political friction specific to USAID. - Large event volume suggests attention and some momentum trades; momentum and headline-driven betting tends to overshoot on symmetric downside risks (i.e., believing abolition is likelier than it is because dismantling rhetoric is salient). - Some traders may conflate "functions moved or agency weakened" with formal abolition; ambiguity in how participants interpret the question can push YES prices up.
Why the market might nonetheless be right or close: The administration has shown capacity to use executive orders and reorganizations fast; if Congress is cooperative or if the administration pursues a phased approach culminating in statutory repeal, the market's 39% is plausible.
Trading implication: if you believe my 28% is correct, YES contracts are overpriced relative to true probability and NO is undervalued. The gap (39% market vs 28% independent) suggests a value trade by selling YES / buying NO, but account for the risk that the market may be pricing in unobserved legislative alignment or private negotiations that materially raise the chance of full abolition.
**Summary judgement**: Formal elimination is a credible threat but not the most likely outcome. Expect significant weakening, transfers of function to State/other bodies, budget choke points, and rebranding — outcomes that often satisfy political goals without achieving clean statutory abolition. Therefore I assign 28% to the binary "eliminated" outcome by 2029-01-20.
Arguments
For
- The administration has already used formal abolition as a tool (e.g., US Agency for Global Media), demonstrating a playbook can be executed.
- Strong political incentives exist to showcase dismantling of federal institutions as a campaign promise fulfillment.
- Executive branch control over budgets, appointments, and reorganization authority can be leveraged to make continuation of USAID difficult.
- Operational overlap with State means functions could be absorbed administratively, creating a path to eliminating the named agency without immediate statutory repeal.
- Sustained staff reductions and attrition across agencies reduce institutional capacity, making a formal abolition easier to argue and implement.
Against
- USAID was established by statute and performs functions tied to national security and international obligations, making clean abolition legally and politically hard.
- Bipartisan support for certain foreign-aid and humanitarian tools exists in Congress; members may resist repeal or force compromises.
- Eliminating USAID risks immediate and visible humanitarian or stability consequences abroad, provoking domestic and international backlash.
- Even with executive intent, full statutory abolition may require legislative cooperation that is uncertain and could be denied or delayed.
- Practical incentives favor transferring functions rather than erasing the agency name — preserving policy control while avoiding political blowback.
- Past examples show administrations often prefer cutting/weakening to outright elimination when dealing with agencies tied to foreign policy.
Key drivers
- Administration willingness and precedent for abolishing agencies via executive action and reorganization
- Congressional composition and willingness to enact or resist statutory repeal or to defend funding appropriations
- Degree to which USAID functions are seen as strategically essential by Defense/State/foreign partners
- Budgetary strategy: whether cuts/defunding are used as a path to elimination versus maintaining minimal funding
- Public and international backlash, especially if abolition undermines humanitarian or crisis responses
Risk factors
- Legal constraints from statutes creating USAID and potential litigation delaying or terminating abolition attempts
- Unexpected international crises (humanitarian disasters, wartime needs) that make abolishing USAID politically costly
- Internal administration preference for functional transfer (to State) rather than name-level abolition
- Congressional pushback even from same-party legislators who value foreign-aid tools for constituency/donor reasons
- Ambiguity in the market on definition of 'eliminated' producing noise and mispricing
Scenarios
Best case
For the 'Yes' outcome: The administration executes a phased plan — aggressive budget cuts, leadership purges, public messaging, an executive reorganization transferring most functions to State and declaring USAID abolished — and Congress either acquiesces or passes enabling legislation repealing statutory protections. By early 2029 the named agency no longer exists in law or practice.
Most likely
A middle path: substantial weakening — large budget cuts, transfers of major programs to State or other entities, rebranding and de facto loss of autonomy — but no clean statutory elimination by Jan 20, 2029. The agency exists on paper but is far smaller and less influential than pre-2025.
Worst case
For the 'No' outcome (agency survives): Bipartisan Congressional resistance, high-profile humanitarian crises, legal challenges, and pushback from defense and foreign-policy stakeholders prevent statutory repeal. USAID retains its statutory identity, even if greatly reduced in staff and budget — functions may be fragmented but the agency's legal existence remains.
More from this day
- PoliticsKalshi1y
2026: Trump's dream year?
AI72%MKT5%Edge+67Hidden GemI estimate a 72% chance the Trump-driven bull case manifests in 2026 — a politically-fueled, broad market rally tied to diplomatic wins, investor narratives (e.g., 'Trump buy' stocks), and macro stability — though it's vulnerable to Fed action and valuation mean reversion.
- PoliticsKalshi18y
Which G7 leader will leave next?
AI30%MKT96%Edge-66HypedI assess ~30% that the UK Prime Minister will be the first G7 leader to leave office — elevated by recent UK turbulence but far lower than the market price, which looks driven by recency and crowding.
- CompaniesKalshi1y
Starbucks total global stores in 2026
AI65%MKT9%Edge+56Hidden GemI assess a better-than-even chance that Starbucks will report more than 41,800 global stores in 2026 — the company is already near that threshold and management growth targets make reaching +800 net stores plausible despite closures and remodeling.