On Wednesday, December 18th, President Trump officially became the 3rd US President to ever be impeached.
The stock market shrugged off the news, for good reason. There is virtually zero chance that Trump will be removed from office.
However, what happens next with impeachment proceedings could indeed have an important effect on the 2020 Presidential race. One that few people realize, but that could indeed have far important ramifications for stocks and the economy in 2020 and far beyond.
What Happens Next With Impeachment?
Congress is now in recess and won’t be coming back until January 7th. The House has yet to submit its approved articles of impeachment to the Senate, where the trial of the President must take place, according to the constitution.
“We will make our decision as to when we are going to send it when we see what they are doing on the Senate side…So far, we have not seen anything that looks fair to us.” – House Speaker Nancy Pelosi
It takes 67 votes in the Senate to remove a sitting president. With 53 votes, it would take 20 Republicans joining all Democrats (some conservative Democrats would probably vote against it), to convict Trump and make him the first US president removed from office.
According to Richard Primus, a constitutional law professor at the University of Michigan Law School, “I don’t know of any source of authority that requires her to send them (the articles).”
That’s a sentiment shared by Stanford Law constitutional professor Bernadette Meyler who told TIME that the Constitution says then the Senate “shall have the sole power to try all impeachments,” not the Senate “shall try all impeachments.”
It’s possible that the House will drag its feet for months before sending articles to the Senate, where the trial would take place, with each Senator acting as a juror, and Chief Justice of the Supreme Court John Roberts presiding over the entire affair.
But if all it takes is 34 Senators to vote for acquittal for Trump to remain in office then how could the impeachment actually have an effect on the Presidential race?
How That Might Indeed Effect The 2020 Race
The Senate trial would convene each day at noon, DC time. According to Senate Majority leader McConnel, “We will have to convene every day, six days out of seven.”
Here’s NPR explaining what that means for the 2020 Primary race.
“Even if a Trump trial only lasts a few weeks, it will still effectively freeze campaigning for Warren, Harris, Booker, Bernie Sanders, Amy Klobuchar and Michael Bennet.”
Here’s Obama’s former campaign manager David Axelrod, explaining how, depending on the timing of the trial, this could be very bad for some candidates.
“I can’t think of more devastating news if you’re running one of these campaigns for president than the news that your candidate is going to be bound to a desk in Washington, day after day, in the run-up to the Iowa caucuses.”
Of course, the actual damage to these candidates wouldn’t be the same. Harris has actually dropped out of the race, and Michael Bennet is polling at 0.5% nationwide.
However, Klobuchar is one of just five candidates that state polls say will receive delegates, and in recent months has set her hopes for a surprisingly strong showing in Iowa.
February 3rd is the Iowa Caucus, and so if the Senate trial began in mid-January her efforts to gain traction in the first state to vote could take a big hit.
(Source: Real Clear Politics)
Buttigieg is starting to slip in Iowa, with Sanders gaining support. Sanders thus has the most to lose from a Senate impeachment trial beginning in January.
But of course, impeachment trials can last several weeks (Clinton’s trial lasted five) and Iowa is just the first primary among many.
If the trial doesn’t begin until the end of January or begins in early February, then the four Senators currently running for President could spend all of February and or March tied up with the impeachment trial and not be able to campaign.
March 3rd is Super Tuesday, when 16 states representing 38% of the delegates, will vote. Through the end of March over 50% of delegates will be apportioned.
What’s the state of the race today?
The latest State Primary Polls
(Sources: fivethirtyeight.com, RealClearPoltics)
Currently Biden is leading the pack of five candidates who have sufficient support to win delegates.
However, as I’ve explained in several articles, there is a 15% cutoff rule, for obtaining delegates.
“There is a 15% minimum threshold to receive any delegates. Those not receiving the minimum are excluded, with the delegate pool divided proportionately among those candidates receiving 15% or more.” – 270towin.com
So when we apply the 15% cutoff rule and then allocate delegates by state, here’s how the race looks like, using the latest primary polls for 34 states available so far.
Delegate Count by State Primary Polls
|% of Delegates In These States||54%||25%||15%||3%||1%|
|% Of Delegates Needed To Win Nomination||89%||41%||25%||5%||1%|
(Sources: fivethirtyeight.com, RealClearPoltics)
Biden is currently just 11% away from winning the nomination since 83% of the delegates are allocated to these 34 states.
Sanders and Warren are doing OK, with 38% of the delegates between them, but they absolutely need to be campaigning strongly in February in order to maximize their delegate hauls from Super Tuesday.
Am I claiming that Pelosi, a Super Delegate who likely supports Biden, is attempting to interfere with her party’s primary process to prevent Warren or Sanders from winning and facing Trump in the general?
No, I’m not a conspiracy theorist who believes such machinations actually occur. But could the timing of the impeachment trial end up benefitting the candidate that the polls say is the Democrat’s best chance to potentially unseat Trump?
It may turn out that way. Right now nationwide head to head polling only shows Biden outside the 4% margin of error against Trump. Sanders and Warren are statistically tied and the same is true in the six swing states that will likely decide the 2020 Presidential race.
|State||Biden vs Trump (average)||Sanders vs Trump (average)||Warren vs Trump (average)|
|FL||Biden +2.0%||Trump +1.0%||Trump +0.3%|
|PA||Biden +7.0%||Sanders +3.7%||Warren +2.0%|
|WI||Biden +4.0%||Sanders +1.4%||Warren +0.4%|
|AZ||Biden +0.4%||Trump +6.3%||Trump +2.3%|
|NC||Biden +3.4%||Sanders +1.0%||Trump +0.4%|
(Source: Real Clear Politics)
Bottom Line: The Impeachment Trial Could Have Major Ramifications for the 2020 Presidential Race…But Only by Determining Who Trump Faces in November
Polls can change of course, including from $1 billion in expected campaign ads that Trump is expected to unleash in the final months of the campaign.
There is a 5% margin of error for state head to head polls and so in most swing states, it’s a statistical tie.
But looking at the best available data we have today, it seems clear that Biden is Trump’s biggest threat to reelection. If the timing of the Senate impeachment trial helps Biden, by preventing Sanders and Warren from campaigning in crucial Super Tuesday states before those March 3rd primaries, then the impeachment of President Trump could indeed prove a profound effect on the 2020 Presidential race.
Not because it hurts Trump, but purely by giving Biden, his biggest threat, a potentially significant boost at the right time, and helping him clinch the nomination.
SPY shares were trading at $321.22 per share on Monday afternoon, up $0.49 (+0.15%). Year-to-date, SPY has gained 30.32%, versus a 30.32% rise in the benchmark S&P 500 index during the same period.
About the Author: Adam Galas
Adam has spent years as a writer for The Motley Fool, Simply Safe Dividends, Seeking Alpha, and Dividend Sensei. His goal is to help people learn how to harness the power of dividend growth investing. Learn more about Adam’s background, along with links to his most recent articles. More...
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