The President’s first impeachment proved to be a non-event from both a political perspective and for markets. The possibility of a second impeachment is likely irrelevant to the equity market but could have significant political implications into 2024 and beyond as the Republican Party manages the post-Trump landscape.

Last night, the House passed a request for the Vice President to activate the 25th Amendment and remove the President from office. The Vice President officially declined to do so, which makes impeachment by the House likely either today or tomorrow. The House vote will largely be on party lines, but not entirely. Third-ranking Republican in the House Liz Cheney of Wyoming (daughter of former Vice President Dick Cheney) said yesterday she will vote “yes” on impeachment, and at least four others have joined her as-of this writing. We don’t have a firm estimate on the number of Republicans who will vote “yes” in the House, but we also note that Trump ally and Minority Leader McCarthy (CA) has said he will not formally whip votes against impeachment, raising the possibility that a material chunk of the Republican caucus could side with Democrats.

Of course, the real action will be in the Senate, where the state of play is quite different. While Democrat Joe Manchin of West Virginia has waffled, we think it’s reasonable to expect Democrats to vote as a bloc, delivering 50 of the 67 votes required for conviction should all Senators participate in the final vote.

A number of Republicans have expressed views that support impeachment. Romney (UT), Toomey (PA), and Murkowski (AK) are firm “yes” votes, with Romney already supporting the prior effort and the other two publicly on the record saying they would his time. Other senators including Blunt (MO), Collins (ME), Portman (OH), and Sasse (NE) have expressed openness to the idea of impeachment. Based on assessments of their public stances, we see 24 GOP Senators as “no” votes, and 18 as insufficiently committed either way.

The 7 potential “yes” votes listed above do not include Mitch McConnell, the Republican Senate’s leader. Reports yesterday from a variety of sources reported that he is ‘pleased’ with impeachment efforts, and supports the removal of the President, but at this point, McConnell hasn’t said anything publicly to support this.  McConnell is a superlative parliamentary strategist and extremely effective politician. If he does in fact support removal and is willing to whip votes for it, then the 7 other potential “yes” votes will increase given the sheer number of uncommitted Senators and the potential for flips among the 24 “no” Senators. In other words, Mitch McConnell will likely decide the President’s fate, and if yesterday’s reporting is accurate, he is leaning towards impeachment. Below we summarize all 50 GOP Senators into three categories: likely yes, likely no, and no way to tell on the question of conviction.

Conviction of the President in the Senate would functionally remove him from the political scene because he would no longer be able to run for office; if convicted, only a simple majority vote would be required to prevent him from ever again seeking federal office. Therefore for 2024 hopefuls, a “yes” vote could be a simple political calculation that the damage to their primary chances is outweighed by the benefit of not being forced to face the President on the ballot. Regardless of motivations, there are enough potential “yes” votes (especially McConnell and those he would bring with him) that a conviction can’t be ruled out at this stage  Also, keep in mind that If a material number of the GOP caucus members abstain from the vote in protest or for other reasons, the number of required votes for conviction drops.

As mentioned above, the possibility of a second impeachment is likely irrelevant to the equity market, especially in the short-term.  Regardless of what happens in the House this week, McConnell has already noted that the earliest the Senate would start a trial would be after the inauguration when President Trump will be out of office already and raises questions of whether it is even possible to hold a trial for a President who is out of office.  All these are no doubt questions that will be debated in the following days, weeks, and months. Like what you see? Click here for a trial to any of Bespoke’s premium membership options.

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