by Greg Valliere, AGF Management Ltd.
Insights and Market Perspectives
Author: Greg Valliere
October 10, 2019
FIRST OF ALL, WE HAVEN’T CHANGED OUR ODDS: Chances of House impeachment by early winter are over 50% while chances of Senate conviction in a trial are no better than 25%. But there’s a scenario, which we lay out below, that could lead to the removal of Donald Trump as president.
IT STARTS WITH THE POLLS: Washington insiders have been stunned by a shift in the polls. A new one — from Fox News, of all places — shows that 51% of Americans support impeachment and removal of Trump from office; 44% are opposed. This confirms an erosion of Trump’s support; clearly, the White House is losing the public relations battle.
THIS IS A VERY BIG DEAL in a city that’s addicted to the polls. While Trump’s loyal base will never abandon him, he’s slipping among independents and this raises the possibility that Mitch McConnell and Senate Republicans may waver in their support for the president. If McConnell believes the Senate is in danger of falling to the Democrats in a tidal wave election, that could be a game-changer for Trump.
THE GOP ENJOYS A SENATE MAJORITY of 53-47, and our most recent review of 2020 seats up for re-election persuades us that Republicans probably will retain the Senate. But that’s far from certain; a wave election could sweep the GOP out, which would have two enormous implications: the Senate would no longer be a firewall, blocking activist legislation from the House, and McConnell’s tidal wave of conservative judicial confirmations would come to an end.
WE THINK ONLY A HANDFUL of GOP senators are ready to bolt, but in private, most of them are sick and tired of Trump, and some are willing to consider Mike Pence as president. And it’s worth noting that many key Republican senators have spoken out harshly against the president’s abandonment of the Kurds, a miscalculation that will reverberate for years in the Mideast.
THAT RAISES A KEY VARIABLE: Upcoming events in the Mideast and elsewhere could move the needle on Capitol Hill — things like the deep slump in the U.S. manufacturing sector, the deteriorating U.S.-China relationship, and more bombshells that seem to explode daily in the Washington Post and the New York Times. The likelihood that these and other developments will provoke more erratic Trump tweets has exasperated Republicans in Congress.
WE’RE NOT CLOSE TO THE 1974 SCENARIO, when veteran Republicans went to the White House on Aug. 7 and told Richard Nixon it was time to leave. They could read the polls, and they feared for their party and the country. Nixon resigned two days later.
TRUMP AND HIS ADORING BASE, already howling about a coup attempt, have intimidated Republican lawmakers for now, but the chances of Trump’s removal — either by the Senate or by the ballot box — have increased significantly in the past month. Trump knows this, so he’s calling McConnell several times a day, urging the Majority Leader to hang tough. McConnell will — unless he thinks the Senate will fall.
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This post was first published at the AGF Perspectives Blog.
