This market will be resolved based on the final approved fiscal year (FY) 2026 federal budget allocation for EPA water quality programs compared to FY2025 levels.
The resolution will be made based on nominal dollars. If the FY2026 number is 90% of the number in FY2025 or below, this market will resolve "Yes." If it exceeds 90% of the number, the market will resolve No.
Elimination of the programs or the EPA will count as $0 funding. Other ambiguous or unanticipated situations will be up to my judgment.
Since budgets are rarely approved by the October 1 "deadline," I'll advance the close date of this market to the date of the appropriate continuing resolution once such a CR is passed. Usually, it's December or January.
Resolution source: Official EPA budget documents and Congressional appropriations records.
Update 2025-11-13 (PST) (AI summary of creator comment): The market close date has been extended to January 30, 2026 to align with the continuing resolution (CR) funding date.
Update 2026-02-22 (PST) (AI summary of creator comment): The creator has shared their working analysis for determining the resolution in a GitHub repository: https://github.com/RadixSeven/resolve-market-about-epa-water-budget
Update 2026-02-23 (PST) (AI summary of creator comment): The creator plans to resolve this market as NO after conducting detailed analysis. They will check for feedback on Thursday or Friday before finalizing the resolution.
Key findings:
Analysis shows 99.3% probability that the budget was reduced by less than 10%
The 97% Credible Interval for the cut is [-0.66%, 5.66%] with a mean cut of 2.73%
Even accounting for uncertainties in categorizing Superfund cleanup activities, the probability of a ≥10% cut remains below 1%
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I apologize for the delay. I'm still looking at this. Resolution is more complicated than I thought it would be. I'll post a preliminary analysis, collect any feedback, and then resolve.
I expected some obvious line items. (Bad prediction on my part. I should have known better. That's what this site is supposed to help me with. So a win?) The main issue is that water quality is split among several line items and though I'm an interested party, I am not an expert. Since my preliminary reading (from throwing the docs at an LLM) is that the decrease was less than 10%, going against the market's expectations, that leaves even more reason to be rigorous.
@EricMoyer If you want to follow along, I put my work in a GitHub repo: https://github.com/RadixSeven/resolve-market-about-epa-water-budget
I think I'm ready to resolve this market as NO.
Evidence
There are two lines of evidence:
1. Just [asking Claude Opus 4.6](https://claude.ai/share/fa834ad8-858a-4a16-a50e-bec0f7d6894a), it said, "By any reasonable definition of "water quality programs," the enacted FY26 numbers are essentially identical to FY25—flat SRFs, flat-to-slightly-increased categorical grants, flat infrastructure grants. The cut is nowhere close to 10%."
2. [My own investigation](https://github.com/RadixSeven/resolve-market-about-epa-water-budget) still has uncertainty due to my lack of expertise and my not fully incorporating earmark data (instead it is listed as an "unknown" fraction to water quality programs), not properly aligning some minor programs that are the same in both years, and not knowing what fraction of some programs should be counted as "water quality". With that, and 10,000,000 samples, I get a 99.3% chance that the budget reduced less than 10%. The 97% Credible Interval around the median is [-0.66%, 5.66%]. It has a mean cut 2.73% with a standard deviation of 2.27%.
Largest remaining uncertainty item
39% of the remaining uncertainty is the item Superfund cleanup and response activities (remainder) My uncertainty about how much of the Superfund cleanup ($242,215,000 cut) should be considered water quality programs makes the amount cut for this program vary between $2,422,150 and $181,661,250. But even when I set this to being 99% sure that it is 100% for water, that only raises the probability of ≥10% cut to 0.8% and does not change the maximum cut for the credible interval at all.
Conclusion
I could get into similar detail for the rest of the contributors to the remaining uncertainty, but I'm pretty sure that there was not a 10% cut. I'm leaving this post for feedback. I'll check back on Thursday or Friday and probably resolve the market unless someone has a very convincing story for me to spend more time on this.
The EPA endangerment finding rescission happening this Thursday (Feb 13) is the bigger story here. If courts block it, EPA regulatory authority stays intact and budget fights become secondary. If it goes through, it's the largest deregulatory action in US history — which paradoxically could mean budget cuts matter less since there's less regulatory mandate to fund. The legal challenges from EDF/NRDC are near-certain; the question is whether any court will issue a preliminary injunction.
The news is looking good for an actual appropriations bill this month! https://www.politico.com/news/2026/01/20/congress-clinches-funding-deal-for-dhs-pentagon-domestic-agencies-00735698?utm_source=flipboard&utm_content=politico/magazine/Politics and https://manifold.markets/Marnix/government-shutdown-in-january-2026
I haven't investigated whether there are drafts available but now might be a good time to update your predictions if they are.
@EricMoyer I extended it until Tuesday because Congress won't be in session so there won't be a chance for a deal.