Which agencies will Trump eliminate?
USAID has already been functionally eliminated as an independent agency (shuttered July 1, 2025 and folded into State); I assess a ~99% chance it will be counted as eliminated during Trump’s term.
Analysis
**Stage 1 — Blind analysis (ignore market prices):**
Based solely on the factual record, the case for "Yes" is extremely strong. The Trump administration issued an executive order on January 20, 2025, initiated a dismantling process that terminated thousands of contracts and most of the workforce, and formally shuttered USAID on July 1, 2025. The remaining foreign assistance functions were transferred into the State Department, with the Office of Foreign Assistance overseeing what remains. Senior administration officials and State Department spokespeople have publicly described this as the elimination and restructuring of USAID. The practical reality — termination of programs, mass layoffs, cessation of funding flows, and a formal administrative closure date — matches the ordinary understanding of an agency being eliminated during the administration that carried out those acts.
Legal and political constraints (Congress refused to authorize statutory abolition and there are ongoing lawsuits) are meaningful but do not negate the empirical fact that USAID no longer operates as an independent agency and has been dismantled. The principal remaining paths to overturning that outcome before January 20, 2029 are (a) a favorable court ruling that invalidates the administrative actions and orders a restoration, and/or (b) affirmative congressional action to re-create or reauthorize an independent USAID. Both are possible but face high legal, logistical, and political hurdles within the timeframe of the current presidential term. Given the comprehensive administrative actions already taken and the political alignment of the presidency during this period, reversal prior to the term’s end is unlikely.
On balance, the independent assessment is that it is virtually certain USAID will be considered "eliminated" during Trump’s term. I assign a 99% probability to the "Yes" outcome to allow a small tail for legal or legislative reversal that could formally restore USAID before Jan 20, 2029.
**Stage 2 — Market calibration (examine current market prices):**
The market currently prices "Yes" at ~32% and "No" at ~68%, which is dramatically lower than the independent assessment. Possible explanations for this large divergence:
- *Definition confusion:* Many traders may interpret "eliminated" narrowly as requiring a statute repealing USAID or a congressional vote to abolish it, rather than an administrative dismantling and folding into State. If traders expect only a legislative abolition to qualify as "eliminated," they may mark the outcome as unlikely even though the agency was operationally shuttered.
- *Stale or uninformed pricing:* The contract may not have fully absorbed or reconciled the July 2025 administrative actions and the market contains participants who are not tracking the specific facts or believe litigation will succeed.
- *Belief in reversal:* Some market participants may overweight the probability that courts will order reinstatement, or that Congress (perhaps pressured by humanitarian impact) will act to restore an independent USAID within the term — scenarios I view as low-probability but that traders might see as plausible.
- *Ambiguity/hedging strategies:* Large-volume positions (this market has substantial volume) and hedging strategies by institutional traders could suppress the Yes price if they are using the contract as a hedge against other bets or political exposures.
Given these likely sources of mispricing, the market appears to understate the factual reality and the probability of a sustained elimination by a large margin. That suggests a clear arbitrage or value opportunity for anyone convinced by administrative actions and public confirmations: the market-implied chance of reversal before Jan 20, 2029 would have to be implausibly high (~68%) to justify the current pricing.
In short: Stage 1 yields ~99% Yes; Stage 2 finds the market at ~32% Yes likely mispricing due to definitional confusion, stale information, or overweighted belief in reversal remedies.
Arguments
For
- Documented closure: USAID was formally shuttered on July 1, 2025, with public administrative notices and confirmations.
- Functional elimination: the agency’s staffing, contracts, and program funding were largely terminated — the concrete actions that constitute elimination in practice.
- Institutional absorption: remaining assistance responsibilities were explicitly transferred to the State Department, removing USAID’s independent institutional structure.
- Consistent policy intent: administration leaders repeatedly articulated the goal of eliminating/restructuring USAID, and followed through with corresponding actions.
Against
- Statutory vs. administrative status: Congress did not authorize abolition; some stakeholders argue only a lawfully passed statute can truly abolish an agency, creating grounds for dispute.
- Pending legal challenges: ongoing lawsuits create a non-zero chance that courts will invalidate the administration’s actions and order restoration.
- Possible legislative reversal within term: Congress could, in principle, act to reestablish or fund an independent USAID during the remaining years of Trump’s term under extraordinary political pressure.
- Interpretation disputes at resolution: event adjudicators may face contested interpretations of whether folding functions into State equals "elimination," which could impact contract settlement if rules are ambiguous.
Key drivers
- Official administrative acts: executive order (Jan 20, 2025) and formal shuttering (July 1, 2025)
- Operational dismantling: termination of contracts, mass layoffs, and cessation of program funding
- Institutional transfer: folding remaining functions into the State Department and creation/expansion of Office of Foreign Assistance
- Political posture of the administration: declared policy goal to eliminate/restructure USAID and public statements by senior officials
- Legal and congressional dynamics: Congress refused statutory abolition but lacks an easy mechanism to reverse an administrative dismantling during the term; active litigation could affect the outcome
Risk factors
- Court reversal: a successful legal challenge could compel restoration of duties or compel administrative reinstatement before Jan 20, 2029
- Congressional action: if political pressure mounts (e.g., humanitarian crisis fallout), Congress could legislate to reestablish an independent agency within the term
- Ambiguity over semantics: differing interpretations of what qualifies as "eliminated" (statutory abolition vs. operational shutdown) create dispute over event resolution
- Operational resurrection complexity: even a favorable court ruling may be slow to translate into a functional, independent agency within the remaining term
Scenarios
Best case
Clear, uncontested recognition that USAID was eliminated during the Trump term: courts either decline to overturn the administrative actions or any legal rulings are slow/limited, and Congress does not reestablish an independent USAID before Jan 20, 2029. The market corrects to near-certain Yes.
Most likely
USAID remains functionally and administratively eliminated (folded into State) through the remainder of the Trump term; litigation may continue but does not fully restore independent USAID before Jan 20, 2029, so the event resolves as Yes.
Worst case
A court finds the administration exceeded its authority and orders immediate restoration or an injunction that effectively reconstitutes USAID as an independent agency, or Congress passes emergency legislation to re-create USAID well before Jan 20, 2029; the event resolves as No.
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