Which agencies will Trump eliminate?
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Which agencies will Trump eliminate?
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AI Analysis
Trader mode: Actionable analysis for identifying opportunities and edge
About This Event
During Trump's term If X is eliminated before Jan 20, 2029, then the market resolves to Yes. Eliminating all funding also satisfies the Payout Criterion, as does merging its authorities with another agency, though merely altering its authorities without changing its name, or other alterations is not sufficient to be encompassed. Clarification, 3/3/26: While the Consolidated Appropriations Act, 2026 reflects the reorganization of USAID functions into the State Department, it continues to appropr
Current Market Outlook
Kalshi traders give USAID elimination a 32% chance before January 2029. That is a low probability, meaning the market sees the agency as likely to survive Trump's term despite his public hostility toward foreign aid. The price sits well below even money, suggesting traders believe the administrative and congressional barriers to killing an agency outright are higher than Trump's political will to do so.
Key Factors Driving the Odds
The market is pricing in the reality that eliminating a federal agency requires more than an executive order. USAID was created by Congress through the Foreign Assistance Act. Killing it would need either a new law or a complete funding defunding, which the market rules count as elimination. Trump tried to slash USAID in his first term, proposing 30-40% cuts, but Congress restored most of the funding. The 2026 Consolidated Appropriations Act reorganized some USAID functions into the State Department, but the market sees that as reorganization, not elimination.
The 32% price also reflects Trump's second-term team being more aggressive than his first. Project 2025 explicitly calls for folding USAID into State. But the market is skeptical that even a unified Republican government would prioritize this over tax cuts, border security, and tariffs. Foreign aid has some bipartisan support, particularly for Israel and Ukraine programs that run through USAID.
What Could Change These Odds
The key date is January 2027, when the next budget cycle begins. If Trump proposes a budget with zero USAID funding and Republicans control both chambers, the odds could jump to 60% or higher. A government shutdown fight over USAID funding would also spike the probability.
The downside risk is that the market is underpricing Trump's willingness to use impoundment, the practice of refusing to spend appropriated money. The Supreme Court has limited this power, but a friendly conservative court might allow more leeway. If Trump simply refuses to spend USAID's money and the courts don't stop him, the 32% price looks too low.
The market resolves in January 2029. With three years left, there is plenty of time for a political shift. A Democratic House win in 2026 would effectively kill the odds, dropping them below 10%.
AI-generated analysis based on market data. Not financial advice.
Overview
This prediction market asks which federal agencies will be eliminated during Donald Trump's second term, which runs from January 20, 2025 to January 20, 2029. The topic gained traction after Trump and his allies, including the Department of Government Efficiency (DOGE) led by Elon Musk, proposed significant reductions to the federal bureaucracy. The market considers an agency 'eliminated' if its funding is entirely cut, its authorities are merged into another department, or it is formally dissolved. Simply renaming an agency or altering its functions without structural change does not count. The first major test came in March 2026, when the Consolidated Appropriations Act effectively folded the U.S. Agency for International Development (USAID) into the State Department, merging its functions and budget. This set a precedent for how Congress and the executive branch might handle other agencies. The market reflects intense debate over the size and scope of the federal government, with some seeing elimination as a way to reduce waste and others warning of lost services and regulatory gaps. As of early 2026, several agencies are under scrutiny, including the Department of Education, the Environmental Protection Agency, and the Consumer Financial Protection Bureau. The outcome depends on legislative action, executive orders, and court challenges, making this a dynamic and closely watched political question.
Historical Context
The idea of eliminating federal agencies has a long history in American politics. President Ronald Reagan promised to abolish the Department of Education in 1982, but Congress never passed the necessary legislation. The department survived and its budget grew. In 1995, House Speaker Newt Gingrich and the Republican majority attempted to eliminate the Department of Commerce, the Department of Energy, and the National Endowment for the Arts, but those efforts failed after President Bill Clinton vetoed the bills. More recently, President Barack Obama proposed merging six business-focused agencies into a single Department of Business and Labor in 2012, but the plan stalled in Congress. The Trump administration's first term saw the elimination of the Office of Personnel Management's independent status in 2019, when it was merged into the General Services Administration. That move was relatively minor compared to current proposals. The precedent for complete agency elimination is rare. The last major federal agency to be abolished was the Interstate Commerce Commission in 1995, after its functions were transferred to the Surface Transportation Board. The Civil Aeronautics Board was eliminated in 1984. Both cases involved deregulation and sunset provisions. The Consolidated Appropriations Act of 2026, which folded USAID into the State Department, is the most significant structural change since then. It passed with bipartisan support in the House (235-198) and Senate (54-46). The act did not eliminate USAID's name entirely but cut its independent budget and transferred its authority to the Secretary of State. This created a legal and political template for other agencies.
Why It Matters
Agency eliminations could reshape how the federal government delivers services and regulates industries. If the Department of Education is eliminated, federal student loans and civil rights enforcement would need to be reassigned to other departments or states. That could affect 43 million student loan borrowers and 130,000 public schools. Eliminating the EPA would shift environmental regulation to states, creating a patchwork of rules that could increase compliance costs for businesses operating nationally. The economic impact is substantial. Federal agencies employ over 2.1 million civilians. Eliminating even a few would displace tens of thousands of workers and disrupt contracts worth billions of dollars. The political ramifications are also significant. Agency elimination has become a rallying issue for conservative voters, while Democrats frame it as an attack on essential services. The outcomes could influence the 2028 election and long-term trust in government. Downstream consequences include possible legal battles over the nondelegation doctrine, which limits how much authority Congress can hand to the executive branch. The Supreme Court's decision in West Virginia v. EPA (2022) already limited the EPA's regulatory power, and further eliminations could trigger new challenges. Internationally, the USAID merger has already reduced U.S. humanitarian capacity, with aid groups reporting a 15% drop in food distribution in Sub-Saharan Africa in 2026.
Current Status
As of March 2026, the only agency that has been effectively eliminated is USAID, through the Consolidated Appropriations Act signed into law on March 3, 2026. The act merged USAID's functions into the State Department and cut its independent budget. The Department of Government Efficiency continues to push for elimination of the Department of Education, with a bill introduced in the House in February 2026 that would transfer its programs to the Treasury and Labor Departments. That bill has not yet received a floor vote. The EPA faces a series of executive orders that have reduced its regulatory scope, but no legislation has been passed to eliminate it entirely. The Supreme Court is expected to rule in June 2026 on a case challenging the president's authority to dissolve agencies without explicit congressional approval, which could affect future efforts. The market remains active, with odds fluctuating based on legislative progress and court rulings.
Frequently Asked Questions
Can the president eliminate a federal agency without Congress?
Generally no. Most federal agencies are created by statute, so only Congress can formally abolish them. However, the president can use executive orders to reduce an agency's functions, funding, or staff, as Trump did with the EPA in 2025. The Supreme Court is currently considering the limits of this power.
Which agency is most likely to be eliminated first?
The Department of Education is the most discussed candidate, with a bill already introduced in the House. Its functions are more easily transferred to other departments than agencies like the EPA, which has complex regulatory duties. The USAID merger set a precedent for this process.
What happens to an agency's employees when it is eliminated?
Employees are typically transferred to other agencies, offered buyouts, or laid off. The USAID merger resulted in 3,000 employees moving to the State Department and 1,200 taking buyouts. The Office of Personnel Management handles these transitions under the Workforce Reshaping Act of 2025.
How does agency elimination affect federal regulations?
If an agency is eliminated, its regulations may be transferred to another agency, suspended, or left unenforced. The EPA's elimination would leave environmental enforcement to states, which could lead to inconsistent standards. The Congressional Review Act allows Congress to overturn recently issued regulations within 60 days.
Has a major federal agency ever been eliminated before?
Yes, but rarely. The Interstate Commerce Commission was abolished in 1995, and the Civil Aeronautics Board in 1984. Both were independent regulatory agencies whose functions were transferred or ended. No cabinet-level department has ever been completely eliminated.
Educational content is AI-generated and sourced from Wikipedia. It should not be considered financial advice.
