Option #1: Unless TSA finds an honest to goodness bomb in their screening process, sometime in the next 4-5 years, I think TSA as we know it will disappear in favor of privatized security (pre 9-11) with a few upgrades but will not require shoes to be removed, liquids banned, ect.

The tides are already turning, just stand in a security line and listen to the conversations about how this security screening is a waste of time. It's not just FT'ers whining anymore. The flying public sees a bunch of fast food employees rummaging through their belongings on a mindless search for shampoo without having ever succeeded in finding a liquid explosive device. Even the DEA has successful drug busts to advertise, the TSA has had nothing other then no further hijackings to support their existence (thanks to cockpit doors not TSA security).

Now if TSA finds a bomb intended to bring down a plane, were all screwed, because not only will they stay around for at least the next 50 years they'll have increased funding to the point that Option #2 is the outcome.