How much government spending will Trump cut before his term ends?
Short Answer
1. Executive Verdict
- Post-2026 divided government likely, hindering non-defense spending cuts.
- One Big Beautiful Bill Act increased federal deficit; Medicaid cuts included.
- IRS funding cuts increase the federal deficit, reducing federal revenue.
- Department of Government Efficiency (DOGE) could reduce federal workforce.
- Further reconciliation packages could enact broad government spending reductions.
Who Wins and Why
| Outcome | Market | Model | Why |
|---|---|---|---|
| At least 250 billion | 30.0% | 75.0% | Model higher by 45.0pp |
| At least 1 trillion | 12.0% | 50.0% | Model higher by 38.0pp |
| At least 2 trillion | 12.0% | 23.2% | The successful passage of deep Medicaid cuts provides Grade A evidence that large-scale reductions are politically feasible, significantly increasing the probability from the market's low baseline; however, this is tempered by the bilateral conflict wherein Congress also demonstrated resistance by protecting other senior programs, preventing a more aggressive update and reflecting the remaining structural barriers to achieving the full $2 trillion target. |
| At least 500 billion | 25.0% | 70.0% | The initial market probability was revised downward as the powerful, positive logit-shift from major Medicaid cuts was neutralized by an equally powerful negative shift from Congressional rejection of other cuts, with indirect fiscal pressures on states providing the decisive, albeit smaller, negative influence on the final outcome. |
| At least 750 billion | 21.0% | 64.9% | The market's 20% baseline, likely anchored on the political difficulty of cutting multiple smaller senior programs, is outweighed by Grade-A evidence of deep, congressionally-approved Medicaid cuts, a single action substantial enough to make the $750 billion threshold highly probable. |
Current Context
2. Market Behavior & Price Dynamics
Historical Price (Probability)
3. Significant Price Movements
Notable price changes detected in the chart, along with research into what caused each movement.
Outcome: At least 250 billion
📉 February 08, 2026: 19.0pp drop
Price decreased from 47.0% to 28.0%
📈 February 05, 2026: 19.0pp spike
Price increased from 28.0% to 47.0%
Outcome: At least 1 trillion
📉 January 26, 2026: 8.0pp drop
Price decreased from 20.0% to 12.0%
4. Market Data
Contract Snapshot
This Kalshi market, titled "Government Budget Cuts," asks "How much government spending will Trump cut before his term ends?". The provided text does not specify the exact conditions for a YES or NO resolution. The market is expected to resolve by the end of a potential Trump term in 2028, but no special settlement conditions are detailed.
Available Contracts
Market options and current pricing
| Outcome bucket | Yes (price) | No (price) | Implied probability |
|---|---|---|---|
| At least 250 billion | $0.30 | $0.72 | 30% |
| At least 500 billion | $0.25 | $0.80 | 25% |
| At least 750 billion | $0.21 | $0.81 | 21% |
| At least 1 trillion | $0.12 | $0.92 | 12% |
| At least 2 trillion | $0.12 | $0.92 | 12% |
Market Discussion
Discussions surrounding former President Trump's potential government spending cuts reveal a contrast between his ambitious proposals and a widespread skepticism regarding their full implementation and impact [^]. Trump has outlined plans for significant reductions across non-defense agencies, foreign aid, and "green" programs, while proposing increased defense spending and forming a "Department of Government Efficiency" to achieve trillions in savings [^]. However, experts and social media users express doubt about the feasibility of substantial overall cuts without addressing major entitlement programs or significantly increasing the national debt due to concurrent tax cut proposals, with prediction markets showing low odds for large-scale reductions [^].
5. How Will Post-2026 Congress Affect Non-Defense Discretionary Spending Cuts?
| Probability of Democratic House | Approximately 79% [^] |
|---|---|
| Probability of Republican Senate | Approximately 60% [^] |
| Proposed NDD Spending Cut | 22.6% ($163 billion) |
6. What are the prospects for mandatory spending cuts and Medicare sequestration?
| OBBBA Enactment | Public Law 119-21, July 2025 [^] |
|---|---|
| OBBBA Gross Spending Cuts | $1.5 trillion - $2.0 trillion over 10 years [^] |
| Medicare Sequestration Risk | $500 billion starting 2026 [^] |
7. How Do Institutional Economic Forecasts Diverge From Administration's Projections?
| Trump Admin 2026 Real GDP Growth | 3.2% (OMB Assumption) [^] |
|---|---|
| CBO 2026 Real GDP Growth | 2.2% [^] |
| Average Annual GDP Growth Divergence (2027-2028) | ~1.3 percentage points (Admin vs [^]. CBO) [^] |
8. Do IRS Workforce Cuts Increase the Federal Deficit and Trigger Sequestration?
| CBO Deficit Increase | $120 billion over a decade |
|---|---|
| Projected IRS Workforce Decrease | 20% from FY2025 to FY2026 |
| Freedom Caucus Stated Strategy | Direct spending cuts and legally binding caps |
9. When Is the Next U.S. Debt Ceiling Crisis Projected?
| Projected X-Date | Early-to-mid 2027 [^] |
|---|---|
| Current Debt Limit | $41.1 trillion [^] |
| RSC Rescissions Proposal | $9.4 billion (June 2025) [^] |
10. What Could Change the Odds
Key Catalysts
Key Dates & Catalysts
- Expiration: March 31, 2029
- Closes: March 31, 2029
11. Decision-Flipping Events
- Trigger: A potential second Trump administration's efforts to cut government spending will be heavily influenced by several factors.
- Trigger: Aggressive implementation of efficiency initiatives, such as the Department of Government Efficiency (DOGE) led by Elon Musk, could significantly reduce the federal workforce and agency operations [^] .
- Trigger: Legislative action, including further reconciliation packages like the 'One Big Beautiful Bill Act' that already included Medicaid cuts, could enact broad spending reductions [^] .
- Trigger: Furthermore, sustained robust economic growth and increasing public demand for fiscal conservatism could create a favorable environment for fiscal restraint [^] .
13. Historical Resolutions
No historical resolution data available for this series.
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