Authored by Philip Marey, senior US strategist at Rabobank, via ZH
- The Democrats in the House of Representatives have decided to start impeachment proceedings against President Trump. While impeachment is possible as the Democrats have a majority in the House of Representatives, conviction is unlikely as long as the Republicans in the Senate continue to support their President. In this case the removal of President Trump from office is unlikely, neither by conviction nor by the 25th Amendment.
- What’s more, history suggests that it will be a challenge for the Democrats to complete the process of impeachment & conviction before Election Day 2020. And then there is – at least as things stand now – virtually no chance of conviction. Consequently, it is unlikely to affect who is on the Republican ticket for the presidential elections in 2020.
- However, it will set the tone for the election campaign. In fact, it could even backfire on the Democrats as it may energize Trump voters to go to the polls. Meanwhile, the impeachment theme may overshadow any political message that the Democrats might want to sell to the electorate. What’s more, Democratic candidate Joe Biden may not come out of this process unscathed. This would strengthen the position of the remaining leading candidates in the Democratic primaries, which are far more left-wing than Biden. While this strengthens the position of the left wing in the Democratic Party, it may scare away centrist voters on Election Day. Since impeachability is a political decision rather than a legal matter, history will tell whether starting an impeachment inquiry was the right decision for the Democrats.
- Impeachment proceedings and the related further deterioration of the US domestic political climate add to the range of factors that are creating the uncertainty for the economic outlook that the Fed is monitoring closely. What’s more, they reduce the chance of meaningful fiscal policy legislation. Therefore, a third insurance cut before the end of the year – which is already in our baseline forecast – has become more likely. It also makes our forecast of a recession in 2020 and the Fed cutting all the way back to zero before the end of next year more likely
Yesterday, the White House released a memorandum of the 30 minute telephone conversation between President Trump and President Zelenskyy – as spelled in the memorandum – on July 25. According to the memorandum President Trump said: ‘The other thing, There’s a lot of talk about Biden’s son, that Biden stopped the prosecution and a lot of people want to find out about that so whatever you can do with the Attorney General would be great. Biden went around bragging that he stopped the prosecution so if you can look into it… It sounds horrible to me.’ Both the Senate and the House adopted resolutions calling on President Trump to release the whistleblower complaint to Congress. Earlier, the House Intelligence Committee set a Friday deadline for the Justice Department to release the whistleblower’s account of this event.
On Tuesday, House Speaker Nancy Pelosi (D) announced on television that she was directing six House committees that were already investigating President Trump to continue their efforts under the umbrella of an impeachment inquiry. She said that ‘the actions taken by the President have seriously violated the Constitution.’ She referred to reports that President Trump has withheld aid to Ukraine while he was pressing President Zelenskyy to investigate Democratic presidential candidate Joe Biden and his son.
In this special we sketch the different scenarios that could now unfold for Trump’s presidency. We start by explaining how the processes of impeachment & conviction work, and the likely outcomes given the current distribution of seats in the House of Representatives and the Senate. We also consider an alternative route to remove the President from office, through the 25th Amendment. We discuss the crucial role that Republican senators will play and the decisive role of voter support for President Trump. We take a look at the likely timeline of impeachment & conviction and the impact on the campaign for the 2020 elections. We also try to assess how this will affect the Fed’s rate decisions.
Impeachment and conviction
People often talk about impeachment as if it were identical to removing the President from office. However, this is not the case. In order to remove a President from office, the House of Representatives first has to impeach him, and then the Senate has to convict him. Note that President Clinton was impeached by the House in 1998, but he was subsequently acquitted by the Senate, so he was not removed from office. The only other President who was impeached by the House was Andrew Johnson in 1868, but he was also acquitted by the Senate. Formally, no US President has ever been removed by impeachment and conviction. When the Republican leadership informed Richard Nixon that impeachment and conviction were inevitable he resigned prematurely and it never came to a vote.
Due to the two stage procedure of impeachment and conviction it is not that easy to remove a President from office. What’s more, while for impeachment in the House of Representatives only a simple majority of more than 1/2 is needed, conviction in the Senate requires a 2/3 majority. At present, the Democrats have a 235-198 majority in the House (1 independent, 1 vacancy). In contrast, the Republicans have a 53-47 majority in the Senate (2 independents formally caucus with the Democrats). Assuming that all the Democrats vote for impeachment and conviction, it would take 20 Republican defectors in the Senate to remove the President from office. This equals about 38% of the Republican Senators. So while impeachment is within reach of the Democrats, the hurdle for conviction is much higher.
An additional complication is that not everybody votes along party lines. President Clinton was impeached by a House of Representatives in which the Republicans had a 228-206 majority. However, while the vote was 228-206 on the perjury charge, it was only 221-212 on the obstruction of justice charge. In fact, 5 Republicans voted against the perjury charge and 12 Republicans voted against the obstruction of justice charge (5 Democrats voted in favor of both charges). Two other charges – another perjury charge and ‘abuse of power’- failed. The impeachment in the House was followed by a trial in the Senate. The Republicans had a 55-45 majority in the Senate, but 5 Republican Senators voted ‘not guilty’ on both charges, while 5 other Republicans voted ‘not guilty’ on the perjury charge. All Democratic Senators supported their President. Hence President Clinton was acquitted on both charges. In fact, the vote got nowhere near the 2/3 majority needed for conviction. So even with a majority in both the House and the Senate, the Republicans were not able to remove a Democratic President from office. This should give us some idea of how difficult it could be to get a Republican President removed by a Senate with a Republican majority.
The crucial factor was that President Clinton kept the support of his fellow Democrats in Congress. In contrast, President Nixon was abandoned by many Republicans during the Watergate affair in the end. In the House of Representatives the Democrats had a 235-182 (18 vacancies) majority and in the Senate a 57-40 majority (1 Conservative, 1 Independent, 1 vacancy). In the Senate it would have taken at least 7 Republican defectors (17.5% of the Republican Senators) to convict Nixon. This underlines that it will be crucial whether the Republicans will continue to defend their President or whether they will defect.
Figure 1: Impeachment and conviction
Besides being removed from office by the Congress, a US President can also decide to step down ‘voluntarily’. In fact, this is what Nixon did when it became clear that impeachment and conviction were inevitable. However, the difference between Watergate and Trumpgate is that Nixon was dealing with Democratic majorities in the House of Representatives and the Senate, while Trump finds his fellow Republicans in control of the Senate. So while Nixon stepped down to avoid a humiliating impeachment and conviction, Trump could survive a trial in the Senate. Nevertheless, in the end Nixon was abandoned by his own party. So if removal from office would become inevitable, President Trump might decide to resign as well.
The 25th Amendment
In theory, there is an alternative legal route to remove the President from office. Since 1967 when the 25th Amendment to the United States Constitution was adopted, if the President is removed from office, resigns or dies, his Vice President automatically becomes the next President of the United States. In 1974 when Richard Nixon stepped down, he was succeeded by Gerald Ford. If Trump is removed from office or if he resigns, the next President would be Mike Pence. This amendment to the Constitution was made because the latter is unclear about who succeeds the President if he or she is removed from office, resigns, dies, or is otherwise unable to discharge the powers of the presidency. While most of these reasons for succession are clearcut, the last provides an interesting twist. What are the criteria for being unable to discharge the powers of the presidency? And who decides when to invoke the 25th Amendment in this case?
Section 4 of the 25th Amendment states that the President could be removed from office by his own Vice President with the support of the majority of the President’s own cabinet. If they send a written declaration that the President is unable to discharge the powers and duties of his office to the President pro tempore of the Senate (Chuck Grassley) and the Speaker of the House of Representatives (Nancy Pelosi) the Vice President (Mike Pence) shall immediately assume the powers and duties of the office as Acting President.
If the President (Donald Trump) then sends a written declaration that no inability exists to the President pro tempore of the Senate and the Speaker of the House of Representatives, he shall resume the powers and duties of his office unless the Vice President and a majority of the Cabinet transmit within 4 days to the President pro tempore of the Senate and the Speaker of the House of Representatives their written declaration that the President is unable to discharge the powers and duties of his office.
Finally, Congress shall decide the issue, assembling within 48 hours for that purpose if not in session. If the Congress, within 21 days after receipt of the latter written declaration, or, if Congress is not in session, within 21 days after Congress is required to assemble, determines by two-thirds vote of both Houses that the President is unable to discharge the powers and duties of his office, the Vice President remains Acting President; otherwise, the President shall resume the powers and duties of his office.
Note that invoking the 25th Amendment would work much faster than impeachment and conviction proceedings: it could be done within 25 days. However, it would require not only 2/3 of the Senate, but also 2/3 of the House of Representatives. What’s more, Section 4 has never been invoked. However, it was briefly considered during the Reagan presidency in 1987 when there were doubts about his abilities to discharge the powers of the presidency, because he appeared ‘inattentive’, ‘inept’, and ‘lazy’. What’s more, it has been argued that Section 4 should have been invoked after the assassination attempt at President Reagan in 1981. While at present it appears unlikely that President Trump will lose the support of his own Vice President and Cabinet before he loses the support of Congress, if time becomes an issue we cannot rule out that Section 4 of the 25th Amendment will be invoked for the first time, especially if impeachment proceedings have not yet started.
What’s more, if the Vice President and the majority of the Cabinet were to invoke Section 4 of the 25th Amendment that could in itself raise the number of Senators and Representatives willing to remove the President from office because of the signal it would provide about the President’s abilities from his inner circle. In fact, the Vice President may decide to consult with the Republican leadership in Congress beforehand.
While Section 4 may not have been written for the current circumstances, the way it is formulated does offer the possibility to use it nevertheless. Note that Section 4 of the 25th Amendment is similar to the ‘high crimes and misdemeanors’ in case of impeachment: it is vague and allows for some discretion to deal with unforeseen circumstances.
Figure 2: The 25th Amendment
Republican Defense or Defection?
While impeachment & conviction has the appearance of a judicial process, it is in fact political. This means that conviction is unlikely as long as the Republicans in the Senate are willing to support their President. The same can be said about the invocation of the 25th Amendment. A crucial event that could determine the willingness of the Republicans to do so is Election Day 2020, when in addition to the White House, all seats in the House of Representatives and 1/3 of the seats in the Senate are at stake. A Republican Senator has no incentive to support the President if it will cost him his re-election. If support for Trump among the Republican voters is waning, this will increase the probability of impeachment and conviction. However, at present it seems that President Trump’s approval rating has stabilized, after a decline in his first year in office. What’s more, according to a Sept 16-20 Reuters/Ipsos poll 82% of registered Republicans approved of his job performance.
An important consideration for the Republicans is that if they remove their own President from office, they will not have to hand over the White House to the Democrats: in fact the Vice President will take over. So once President Trump is removed, Vice President Pence will become the next President of the United States. He has a much longer track record within the Republican Party than President Trump and Pence’s views are broadly in line with the conservative wing of the party.
In terms of the legislative agenda we could see a new chance of progress if we move from a constitutional crisis to a new President as Washington DC could refocus on making policy. Therefore the incentives for the Republicans to defect depend both on their re-election chances in 2020, and the increased probability of getting things done once they remove the President from office if progress on the legislative agenda has come to a standstill.
How much time could impeachment and conviction take? President Clinton’s impeachment proceedings lasted from January 3, 1998, until December 19, 1998. The Senate trial took place from January 7, 1999, until February 12, 1999. So impeachment of Clinton by the House took almost 12 months, his trial in the Senate ended two months later. If we are going to see the same time schedule, it could take until September 2020 before President Trump is impeached and his trial in the Senate would last until November 2020, probably after Election Day. So it will be a challenge for the Democrats to get President Trump impeached before Election Day 2020, and then there is – at least as things stand now – virtually no chance of conviction.
Impact on the elections
Consequently, it will not affect who is on the Republican ticket for the presidential elections in 2020. However, it will set the tone for the election campaign. In fact, it could even backfire on the Democrats as it may energize Trump voters to go to the polls. Meanwhile, the impeachment theme may overshadow any political message that the Democrats might want to sell to the electorate. What’s more, Democratic candidate Joe Biden may not come out of this process unscathed6. This would strengthen the position of the remaining leading candidates in the Democratic primaries, which are far more left-wing than Biden. While this strengthens the position of the left wing in the Democratic Party, it may scare away centrist voters on Election Day. Since impeachability is a political decision rather than a legal matter, history will tell whether starting an impeachment inquiry was the right decision for the Democrats.
Scenarios for Trump’s presidency
To summarize, we have identified 5 possible scenarios for Trump’s presidency. In the two most likely scenarios President Trump remains in office, at least until Election Day 2020.
In the first scenario, the Democrats fail to impeach the President, despite their majority. This could occur if the Democratic leadership fails to persuade enough Democratic Congressmen that impeachment is either justified or smart politics.
In the second scenario, the Democrats are successful in impeaching the President, but the Republicans prevent a conviction in the Senate.
A less likely scenario is that the Republicans abandon their President and contribute to a 2/3 majority in the Senate to convict Trump. This would lead to his removal from office. It would take an alarming decline in voter support for Republicans to take this approach.
Two other unlikely scenarios involve the invocation of the 25th Amendment. In this case Trump’s own Vice President and Cabinet, with the approval of Congress, decide that his removal from office is warranted, either because of irresponsible behavior or because he is hurting the reelection chances of the Republicans in Congress. So the initiative would come from President Trump’s own Republican Party, not the Democratic opposition. The ‘25th Amendment’ route offers 2 scenarios: resumption of office or removal from office. The latter would require the largest decline in voter support for Trump.
While at present we think that President Trump will not be removed from office through either Impeachment & Conviction or through the 25th Amendment, the probabilities that we attach to the various scenarios could evolve over time. Events in recent years have taught us that what seems unlikely today could be reality in the not too distant future. What’s more, history has shown that in the end Nixon was abandoned by his own party and Reagan’s inner circle at one time contemplated invoking the 25th Amendment.
More for the Fed to worry about
For the Fed, the impeachment proceedings and the related further deterioration of the US domestic political climate add to the range of factors – such as the global economic growth, trade policies, Brexit – that are creating the uncertainty to the central bank’s outlook that it is monitoring closely. What’s more, the increased partisanship reduces the chance of meaningful fiscal policy legislation. This means that the burden of sustaining the economic expansion will continue to fall on monetary policy. Therefore, a third insurance cut before the end of the year – which is already in our baseline forecast – has become more likely. It also makes our forecast of a recession in 2020 and the Fed cutting all the way back to zero before the end of next year more likely.