How much government spending will Trump cut before his term ends?
Short Answer
President Trump is likely to achieve at least $1 billion in government spending cuts before his term ends, a minimal target amidst proposed non-defense cuts, priced at 80.0%.
1. Market Behavior & Drivers
Market pricing for significant government spending cuts has remained low, anchored by reports of President Trump's political weakness. The probability implied by the market fell from 9.1% on August 30 to 7.9% on September 7, coinciding with news that the president's approval rating had fallen to a record low of 33%. The same reports cited an ongoing conflict with Iran and domestic economic dissatisfaction as factors weighing on the administration ahead of midterm elections.
The market has traded sideways overall, with the current price of 7.9% near the opening price of 7.1%. While the price reached 43.0% at one point, the provided context does not explain that peak. The recent price moves have occurred on zero volume, suggesting low market conviction. The low probability assigned by the market is consistent with a political environment seen as unfavorable for enacting major fiscal changes.
- Since last update (~165d): Market-led probability for 'At least 2 trillion' dropped 4.0pp, compressing the edge as the model tracked.
- Market-led 'At least 500 billion' probability surged 4.0pp, widening the edge despite no model change.
- Headline 'At least 250 billion' probability fell 2.1pp market-led, compressing the edge as model tracked.
- New spending cut thresholds were added, while the 'At least 1 trillion' outcome was removed.
- At least $1 billion in cuts registers 85% model probability for specified thresholds.
- Yet, overall discretionary budget authority for FY2027 is expected to increase.
- Congressional resistance and defense spending hikes largely offset proposed reductions.
Who Wins and Why
| Outcome | Market | Model | Why |
|---|---|---|---|
| At least 250 billion | 7.9% | 3.9% | Achieving larger net federal spending cuts is unlikely due to congressional resistance and offsetting increases. |
| At least 1 trillion | 4.8% | 3.9% | Market higher by 0.9pp |
| At least 500 billion | 7.0% | 3.5% | Achieving larger net federal spending cuts is unlikely due to congressional resistance and offsetting increases. |
| At least 2 trillion | 1.0% | 0.5% | Achieving larger net federal spending cuts is unlikely due to congressional resistance and offsetting increases. |
| At least 750 billion | 5.9% | 2.9% | Achieving larger net federal spending cuts is unlikely due to congressional resistance and offsetting increases. |
Current Context
No comprehensive spending cut total is available for Trump's full term. President Donald Trump, serving his second nonconsecutive term from January 20, 2025, to January 20, 2029 [1][2][3], faces a record low approval rating of 33% as of September 7, 2026, amid an Iran conflict, economic dissatisfaction, and impending midterm elections [4][5][6]. Federal government current expenditures reached approximately $7.76 trillion at a seasonally adjusted annual rate in Q2 2026, fluctuating through the year with an upturn in Q1 and a decrease in Q2 [7][8][9][10][11][12]. While expert analysis from 2025 explored scenarios for budget changes, no definitive prediction on total government spending cuts by 2029 was provided [13]. The available data does not include a single quantified aggregate for total government spending reductions spanning FY 2027 through FY 2028, leading up to the end of his term [14][15][16][17][18][19].
The FY 2027 budget request outlines significant non-defense cuts alongside defense increases. This plan proposes a 10.00% cut to non-defense spending compared to 2026 levels [14][15][16][17][18][19]. Concurrently, it includes a $500.00 billion increase in the military budget, targeting a $1.50 trillion defense request for 2027 [14][15][16][17][18][19]. Proposed reductions across domestic agencies include 30.40% from State and international programs, 19.00% from Agriculture, an $8.50 billion cut from K-12 education, and a $2.70 billion cut from higher education [14][15][16][17][18][19]. The budget also targets a $4.60 billion cut from the EPA, $1.30 billion from FEMA community disaster preparedness grants, and $5.00 billion each from public health/mental health/disease prevention and NIH [14][15][16][17][18][19]. Furthermore, the request proposes cutting over 9,400 TSA workers and more than $1.50 billion from the TSA's budget, representing about a 20.00% reduction [14][15][16][17][18][19]. A $5.00 billion "pocket rescission" to eliminate foreign aid is also described in the budget materials [14][15][16][17][18][19]. A presidential memorandum from April 8, 2026, ordered that direct spending budget resources for FY 2027 in non-exempt accounts be reduced effective October 1, 2026, though the specific dollar amount was not detailed in the provided memo [14][15][16][17][18][19].
Sources (19)
- 1President Donald Trump [R, 2025-2029]...govtrack.us
- 2Second presidency of Donald Trumpen.wikipedia.org
- 3How long has Donald Trump been president? How many days has it been?usatoday.com
- 4As the Iran war flares, Donald Trump looks for an exit to ease mounting political pain - ABC Newsabc.net.au
- 5Trump approval rating drops to record low in new poll | The Independentindependent.co.uk
- 6Republicans Panic as Trump Becomes Midterm ‘Ball and Chain’thedailybeast.com
- 7SCB, Government Receipts and Expenditures: First Quarter 2026, July 2026apps.bea.gov
- 8Q2 2026, Table 3.2. Federal Government Current Receipts and Expenditures: Quarterly | FRED | St. Louis Fedfred.stlouisfed.org
- 9Federal Government: Current Expenditures (FGEXPND) | FRED | St. Louis Fedfred.stlouisfed.org
- 10Table Data - Federal government total expenditures | FRED | St. Louis Fedfred.stlouisfed.org
- 11GDP (Advance Estimate), 1st Quarter 2026 | U.S. Bureau of Economic Analysis (BEA)bea.gov
- 12GDP (Second Estimate) and Corporate Profits, 2nd Quarter 2026 | U.S. Bureau of Economic Analysis (BEA)bea.gov
- 13U.S. Economic Policy Headwindnewyorkfed.org
- 14seekingalpha.comOctagon Agent
- 15seekingalpha.comOctagon Agent
- 16www.reuters.comOctagon Agentreuters.com
- 17www.reuters.comOctagon Agentreuters.com
- 18seekingalpha.comOctagon Agent
- 19seekingalpha.comOctagon Agent
2. Price Chart
Historical Price (Probability)
Outcome probability
Date
3. Significant Price Movements
Notable price changes detected in the chart, along with research into what caused each movement.
📉 September 06, 2026: 84.0pp drop
Price decreased from 96.0% to 12.0%
Outcome: At least 100 billion
What happened: The primary driver of the prediction market price drop was the sustained lack of realized significant government spending cuts and congressional resistance to proposed reductions. By early 2026, Congress had largely rejected President Trump's proposed $163 billion in FY2026 cuts, keeping discretionary spending similar to the prior year [1]. Furthermore, U.S. federal government expenditures in Q1 and Q2 2026, reported in July 2026, did not show a $100 billion reduction in total spending, and the most concrete FY2027 proposals for non-defense cuts were around $72-73 billion, falling short of the "at least $100 billion" market outcome [2][3][4][5][6]. Social media was not a primary driver, as the provided research did not identify relevant posts or viral narratives from key figures impacting this specific market.
Sources (6)
- 1Trump Sought Vast Budget Cuts. Congress Granted Few. - The New York Timesnytimes.com
- 2SCB, Government Receipts and Expenditures: First Quarter 2026, July 2026apps.bea.gov
- 3Q1 2026, Table 3.16. Government Current Expenditures by Function: Quarterly | FRED | St. Louis Fedfred.stlouisfed.org
- 4Q2 2026, Table 3.2. Federal Government Current Receipts and Expenditures: Quarterly | FRED | St. Louis Fedfred.stlouisfed.org
- 5cbo.govOctagon Agent
- 6ofr.harvard.eduOctagon Agent
4. Market Data
Contract Snapshot
This market resolves YES if government spending cuts during Trump's term amount to at least $150 billion, and NO if they are less than $150 billion. The maximum payout date for this market is March 31, 2029. The provided content does not detail the specific methodology for measuring "government spending cuts" or any special settlement conditions.
Available Contracts
Market options and current pricing
| Outcome bucket | Yes (price) | No (price) | Last trade probability |
|---|---|---|---|
| At least 150 billion | $0.11 | $0.90 | 97% |
| At least $1 billion | $0.12 | $0.92 | 80% |
| At least 100 billion | $0.11 | $0.90 | 12% |
| At least 200 billion | $0.11 | $0.90 | 11% |
| At least 50 billion | $0.10 | $0.91 | 10% |
| At least 250 billion | $0.08 | $0.93 | 8% |
| At least 500 billion | $0.07 | $0.94 | 7% |
| At least 750 billion | $0.06 | $0.95 | 6% |
| At least 1 trillion | $0.04 | $0.99 | 5% |
| At least 2 trillion | $0.04 | $1.00 | 1% |
Market Discussion
President Trump’s FY 2026 budget proposal, released in May 2025, specifically called for $163 billion in cuts to non-defense discretionary spending, while simultaneously requesting significant increases for defense and homeland security [1][2][3][4]. Despite proposed reductions and targeted program cuts, the Congressional Budget Office (CBO) projected a $1.9 trillion deficit for fiscal year 2026, with economic analysis suggesting that other administration policies like tax cuts and tariffs tend to offset the budgetary impact of discretionary spending reductions [5][6][7][8]. As a result, prediction markets in August/September 2026 assigned a very low probability (3-4%) to achieving total net federal government spending cuts of $250 billion or more by the end of 2026 [9][10][11].
Sources (11)
- 1White House pitches sharp spending cuts in Trump budget plan | AP Newsapnews.com
- 2Trump's 2026 budget proposal calls for $163B in cuts to federal spending - ABC Newsabcnews.com
- 3PRESIDENT TRUMP’S FISCAL YEAR 2026govinfo.gov
- 4White House comes out with sharp spending cuts in Trump's 2026 budget plan - Los Angeles Timeslatimes.com
- 5Federal government cuts are testing Maryland's economic resiliencebrookings.edu
- 6The Budget and Economic Outlook: 2026 to 2036cbo.gov
- 72026 State of the Union: Trump Tariffs & Tax Cuts - Tax Foundationtaxfoundation.org
- 8Trump Tariffs Threaten to Offset Big Beautiful Bill Trump Tax Cutstaxfoundation.org
- 9How much government spending will Trump cut before 2027? - Kalshikalshi.com
- 10How much government spending will Trump cut before 2027? | Prediction Markets | Coinbasecoinbase.com
- 11How much government spending will Trump cut… | ElectionOddselectionodds.live
5. Trust Index
Order book is critically thin.
Primary risk· Trade quality
How it adds up
Integrity80% of score76Good
Market integrity is low (62), but Integrity averages all three scores, so the other two pull it up. Only a critically low score would cap the total.
Trade quality20% of score37High Risk
Includes the cost to trade: a $10,000 order can't be filled here because the order book is too thin.
Trust score68Caution
Weighted blend with hard caps — a critically weak safety pillar, or a severe trading anomaly, caps the total regardless of the rest. Full methodology · About the Trust Index
Trust profile
Integrity4 screens run · 6 don't apply
6. How might the results of the 2026 midterm elections affect the Trump administration's ability to pass its proposed FY2027 and FY2028 spending cuts?
| Proposed FY2027 NDD Spending Cut | ~$73 billion [1][2][3][4] |
|---|---|
| Probability of $250B+ Net Spending Cuts (by Jan 2029) | 7-10% or lower [5][6][7][8] |
| Impact of Divided Government on Spending Cuts | Significant hindrance expected [9][10][11] |
The Trump administration's FY2027 budget proposes cuts, but faces significant skepticism. The administration's FY2027 budget request outlines an approximate 10% reduction in non-defense discretionary (NDD) spending, amounting to about $73 billion [1][2][3][4]. However, this budget also includes considerable increases in defense funding, leading to an overall rise in total discretionary budget authority compared to FY2026 levels [1][2][3][4]. Analysts largely do not expect these proposals to be enacted as presented, citing anticipated Congressional opposition [1][2][3][4]. Prediction markets also express skepticism, with odds for net government spending cuts of $250 billion or more by January 2029 estimated at 7-10% or lower, due to political hurdles and existing entitlement program structures [5][6][7][8].
The 2026 midterms could hinder Trump's spending cut agenda significantly. The 2026 midterm elections are expected to result in a highly contested balance of power, increasing the likelihood of a divided government, particularly if Democrats secure control of the House [9][10][11]. Such an outcome would substantially impede the Trump administration's ability to implement its proposed spending reductions for both FY2027 and FY2028 [9][10][11]. A Democratic-controlled House would likely intensify oversight and complicate crucial negotiations around the debt limit and appropriations, thereby constraining the administration's broader fiscal agenda [9][10][11].
Sources (11)
- 1An Overview of the President's FY 2027 Budgetcrfb.org
- 2Highlights of President Trump's FY 2027 Budget - AAFamericanactionforum.org
- 3White House Releases Budget Request for FY 2027: Top Highlights...naco.org
- 4[PDF] PRESIDENT TRUMP'S FY 2027 D ISCRETIONARY FUNDING...epicforamerica.org
- 5How much government spending will Trump cut before his term ends? — Kalshi — Prediction Markets | Mantapexmantapex.com
- 6How much government spending will Trump cut… | ElectionOddselectionodds.live
- 7How much government spending will Trump cut before his term ends?markets.bitcoin.com
- 8Will government spending decrease by 100 before 2028? | Paritypredictparity.com
- 9Here's why markets are starting to care about the 2026 election 10...cnbc.com
- 10What the 2026 Midterms Could Mean for the Marketsschwab.com
- 11Why are the 2026 midterm elections important? USC experts explainpriceschool.usc.edu
7. Based on the White House's FY 2027 budget request, what is the total dollar value of proposed cuts to non-defense discretionary spending compared to the CBO's baseline?
| 10-year NDD reduction vs. CBO baseline | $2.5 trillion [1] |
|---|---|
| Proposed NDD spending reduction | 10% [2][1][3] |
| Proposed NDD spending cut (FY2026) | $73 billion [2][1][3] |
The White House's FY 2027 budget proposes significant non-defense discretionary cuts. President Trump's budget request for fiscal year 2027 includes a proposed 10% reduction in non-defense discretionary (NDD) spending. This specific annual cut is estimated to be $73 billion when measured against the enacted spending levels for fiscal year 2026 [2][1][3].
A long-term strategy aims for substantial non-defense discretionary budget reductions. Beyond the immediate fiscal year, the White House's budget request also details a comprehensive 10-year plan. This plan targets a substantial total decrease of $2.5 trillion in NDD budget authority, relative to the baseline projections established by the Congressional Budget Office (CBO) [1].
8. How do President Trump's proposed FY2027 budget changes for the Department of Defense compare to the proposed cuts for agencies like the EPA and the Department of Education?
| FY 2027 Defense Spending | $1.5 trillion, 42% increase over FY 2026 [1][2][3] |
|---|---|
| Non-Defense Discretionary (NDD) Spending Reduction | 10% or $73 billion [1][2][3] |
| EPA Proposed Cut | 52.4% reduction [1][4][2] |
President Trump's FY 2027 budget proposes a significant increase in defense spending. The proposed budget outlines a stark contrast in funding priorities, advocating for a substantial boost in defense spending while simultaneously seeking reductions across non-defense discretionary sectors, including agencies like the Environmental Protection Agency and the Department of Education. Specifically, the FY 2027 budget request suggests total defense spending of $1.5 trillion, marking an approximate 42% increase over FY 2026 enacted levels [1][2][3].
Non-defense discretionary spending faces a 10% cut, with specific agencies targeted. The budget aims for a 10% reduction in non-defense discretionary (NDD) spending, equivalent to $73 billion [1][2][3]. Within the non-defense sector, particularly deep proposed cuts include a 52.4% reduction for the Environmental Protection Agency (EPA) [1][4][2]. The Department of Education is also slated for a proposed 2.9% cut, although this reduction is partially mitigated by a one-time $10.5 billion infusion designated for Pell Grant funding [1][4][2].
9. Which specific data releases from the Bureau of Economic Analysis and the U.S. Treasury will be used to track federal expenditures for this market's resolution?
| Series tracked for market resolution | Federal Government: Current Expenditures (FGEXPND) [1][2][1] |
|---|---|
| Primary BEA data source | NIPA Table 3.2, "Federal Government Current Receipts and Expenditures" [3][2][4][5] |
| Key U.S. Treasury data source | Monthly Treasury Statement (MTS) [6][7] |
Federal expenditure tracking for prediction markets relies on specific BEA data. For the prediction market, federal expenditures are specifically tracked using the Bureau of Economic Analysis (BEA) data series "Federal Government: Current Expenditures" (FGEXPND), which is an integral component of the National Income and Product Accounts (NIPA) GDP release [1][2][1]. Despite the U.S. Treasury publishing various outlays data, including the Monthly Treasury Statement (MTS), the market's resolution explicitly relies on the BEA's FGEXPND series [8][9].
The BEA's NIPA framework provides detailed federal expenditure series. The primary BEA data source for resolving federal government expenditures in prediction markets is NIPA Table 3.2, titled "Federal Government Current Receipts and Expenditures" [3][2][4][5]. FGEXPND is a quarterly series, presented at a seasonally adjusted annual rate, and is published as part of the broader NIPA GDP release [2][1]. Additional relevant BEA releases from the NIPA framework include Table 3.1: Government Current Receipts and Expenditures, and Table 3.10: Federal Government Consumption Expenditures and Gross Investment, which is considered the most direct BEA series for federal spending within GDP accounting [10][11][12][13][14][15].
U.S. Treasury data provides foundational input for BEA's estimates. The U.S. Treasury provides foundational data via the Monthly Treasury Statement (MTS), serving as a core source for federal outlays, which the BEA utilizes to construct and reconcile its NIPA-based federal spending estimates [6][7]. Key U.S. Treasury releases for tracking federal spending on an outlays basis include the Combined Statement of Receipts, Outlays, and Balances and the Monthly Treasury Statement (MTS) outlays series [10][11][12][13][14][15]. The Daily Treasury Statement (DTS) also offers useful near-real-time cash operations monitoring, though it operates on a cash-basis rather than budget outlays [10][11][12][13][14][15].
Sources (15)
- 1How much government spending will Trump cut before his term ends? Odds & Market Details | Bitcoin.com Marketsmarkets.bitcoin.com
- 2Federal Government: Current Expenditures (FGEXPND) - FREDfred.stlouisfed.org
- 3Government Receipts and Expenditures | U.S. Bureau of Economic...bea.gov
- 4SCB, Government Receipts and Expenditures: First Quarter 2026, July 2026apps.bea.gov
- 5Q2 2026, Table 3.2. Federal Government Current Receipts and Expenditures: Quarterly | FRED | St. Louis Fedfred.stlouisfed.org
- 6Total Federal Outlays (MTSO133FMS) | FRED | St. Louis Fedfred.stlouisfed.org
- 7Overview of source data and estimating methodsbea.gov
- 8Monthly Treasury Statement (MTS)fiscaldata.treasury.gov
- 9Reports, Statements & Publications | Bureau of the Fiscal Servicefiscal.treasury.gov
- 10seekingalpha.comOctagon Agent
- 11seekingalpha.comOctagon Agent
- 12www.reuters.comOctagon Agentreuters.com
- 13www.reuters.comOctagon Agentreuters.com
- 14seekingalpha.comOctagon Agent
- 15www.reuters.comOctagon Agentreuters.com
10. What macroeconomic or geopolitical events, such as a recession or military escalation with Iran, could force the Trump administration to increase federal spending before 2029?
| Forecasted 2026 GDP Growth | 1.2% (New York Fed DSGE model, June 2026) [1] |
|---|---|
| Probability of Recession (March 2026) | 35.8% [2] |
| Primary Drivers of Increased Federal Spending | Recession or economic weakness, military escalation or conflict [3][4][5][6][7][8] |
Economic weakness and military conflict are projected to increase federal spending. Federal outlays and deficits automatically rise when the economy weakens due to established mechanisms like unemployment-related and other cyclical programs [3][4][5][6][7][8]. Additionally, geopolitical or military exigencies place upward pressure on federal spending, often leading to increased defense outlays through supplemental and emergency funding [3][4][5][6][7][8][9][10].
Economic forecasts suggest potential conditions requiring increased federal spending. As of June 2026, the New York Fed DSGE model projected 2026 GDP growth at 1.2%, and a 35.8% probability of recession was noted in March 2026 [1][2]. Macroeconomic theory indicates that direct government spending is particularly effective at stimulating aggregate demand during such economic downturns [11].
Sources (11)
- 1The New York Fed DSGE Model Forecast—March 2026 - Liberty Street Economicslibertystreeteconomics.newyorkfed.org
- 2The New York Fed DSGE Model Forecast—June 2026 - Liberty Street Economicslibertystreeteconomics.newyorkfed.org
- 3seekingalpha.comOctagon Agent
- 4seekingalpha.comOctagon Agent
- 5www.reuters.comOctagon Agentreuters.com
- 6www.reuters.comOctagon Agentreuters.com
- 7seekingalpha.comOctagon Agent
- 8www.reuters.comOctagon Agentreuters.com
- 9The U.S. economy in 2026: What to watch forsiepr.stanford.edu
- 10US economic forecast | Deloitte Insightsdeloitte.com
- 11What Fiscal Policy is Effective at Zero Interest Rates? - Federal Reserve Bank of New York - FEDERAL RESERVE BANK of NEW YORKnewyorkfed.org
11. What Could Change the Odds
Key Catalysts
President Trump has aggressively proposed major cuts to non-defense discretionary spending, including an estimated $163 billion in FY 2026 and a 10% cut in FY 2027 [1][2]. However, Congress has largely rejected these proposals, maintaining overall discretionary spending relatively flat compared to prior administration levels [1][3][2]. Spending policy in a second term has prioritized large increases for defense, such as a 13% increase in FY 2026 and a proposed $1.5 trillion for FY 2027, alongside a 65% increase for DHS in FY 2026 for border and immigration enforcement [3][4][2]. Prediction markets and economic forecasters express caution regarding 2026–2029 economic growth, with significant betting volume clustering around moderate growth ranges of 1.6–2.5% [5][6]. Concerns include restrictive monetary policy, trade tensions, and potential recessionary pressures [5][6][7].
Key catalysts for economic volatility and growth include U.S. tariff policy, Federal Reserve interest rate decisions, AI-related economic contributions, and the outcome of ongoing immigration enforcement and deregulation efforts [6][8]. The Trump administration's approach involves trade policy uncertainty and tariff-related tensions, which are reported to influence business investment decisions and consumer anxiety [9]. The Economic Policy Uncertainty Index for government spending registered 119.56 in June 2026, down from 211.06 in March 2026 [10]. The Federal Reserve Bank of New York’s DSGE model forecasts 2026 GDP growth at 1.2% (Q4/Q4), while FOMC projections from mid-2026 place GDP growth around 2.15%–2.2% for 2026 [11][12][13].
Key Dates & Catalysts
- Expiration: March 31, 2029
- Closes: March 31, 2029
Sources (13)
- 1Trump Sought Vast Budget Cuts. Congress Granted Few. - The New York Timesnytimes.com
- 2[PDF] Budget of the U.S. Government - The White Housewhitehouse.gov
- 3Trump unveils 2027 budget with major boost in Pentagon spending | AP Newsapnews.com
- 4PRESIDENT TRUMP’S FISCAL YEAR 2026govinfo.gov
- 52029 GDP Growth: Why is the market so bearish on a normal range? — KalshiRadarkalshiradar.com
- 6WIll the United States Economy avoid a recession by 2029? | Manifoldmanifold.markets
- 7Who Wins 2026 World GDP Growth? Live Odds & Field | Lines.comlines.com
- 8IMF Lifts US Growth Outlook, Betting Markets Raise Odds On Trump-Led Economic Boom - State Street SPDR S& - Benzingabenzinga.com
- 9An Era of Heightened Policy Uncertaintynewyorkfed.org
- 10Economic Policy Uncertainty Index: Categorical Index: Government spending (EPUGOVTSPEND) | FRED | St. Louis Fedfred.stlouisfed.org
- 11The New York Fed DSGE Model Forecast—June 2026 - Liberty Street Economicslibertystreeteconomics.newyorkfed.org
- 12FOMC Summary of Economic Projections for the Growth Rate of Real Gross Domestic Product, Central Tendency, Midpoint | FRED | St. Louis Fedfred.stlouisfed.org
- 13FOMC Summary of Economic Projections for the Growth Rate of Real Gross Domestic Product, Range, Midpoint (GDPC1RM) | FRED | St. Louis Fedfred.stlouisfed.org
