Is There Any Chance the Senate Could Convict? Plus, More Tax Cuts on the Table
Author: Greg Valliere
November 2, 2019
WITH HOUSE IMPEACHMENT NOW A VIRTUAL CERTAINTY sometime before Christmas, the only question that matters is whether there’s any chance the Senate could convict Donald Trump in a trial. We’ve consistently argued that it’s very unlikely — there aren’t 67 votes to oust him — but there are two scenarios that could change that assessment . . .
1. More allegations: For now, most Republicans we talk with say a clearly improper phone call with Ukraine doesn’t rise to the impeachment standard of “high crimes and misdemeanors.” But they add one caveat — this assumes that there are no further damaging revelations.
But there’s the potential for some game changers — will John Bolton testify, in public, later this month? What’s in the new book by “Anonymous,” due out later in November? Were the Ukraine tapes doctored? And of course there’s always the likelihood that Trump will over-react; he always rises to the bait.
2. Could Mitch McConnell waiver? We think the Senate Majority Leader will stay in Trump’s corner, but the polls are important. If it suddenly looks like Trump could lose in a landslide — unlikely but not impossible — that clearly would jeopardize the GOP’s control of the Senate. And that would make McConnell nervous because it would weaken the Senate’s firewall against leftist legislation from the House.
McConnell has distanced himself from Trump — most notably over the president’s abandonment of the Kurds — and McConnell apparently is willing to let a full trial begin in the Senate later this winter. A McConnell endorsement of Trump’s conviction in a trial seems unthinkable now, but it’s worth noting that in private, he’s increasingly exasperated with this erratic president.
BOTTOM LINE: . The math is simple — even if all 47 Democrats in the Senate voted to convict, there would have to be 20 GOP defectors to get the 67 votes to oust Trump. Maybe four or five Republicans will defect, but 20 seems like an impossibly high bar to clear, barring fresh developments like the two we cited above. Odds of impeachment: 80%. Odds of conviction: 25%.
* * * * *
MORE TAX CUTS? We wrote on Wednesday that every one of the Democrats running for president is proposing all sorts of tax hikes, many of them huge. So it was only a matter of time before the other shoe dropped, and sure enough — there was a piece in the Washington Post yesterday describing a Trump Administration pursuit of still another tax cut.
LARRY KUDLOW IS LEADING a project to get a tax cut bill on the table before this Christmas, in plenty of time to become a central issue in the 2020 campaign. The bill apparently will include making the 2017 cuts permanent, indexing capital gains for inflation, lowering payroll taxes and, probably, cutting rates across-the-board. The price tag is irrelevant.
THIS HAS VIRTUALLY NO CHANCE OF PASSAGE IN THE HOUSE unless the Democrats can get steep hikes on corporate and individual tax rates. So why even bother to propose this? Trump and Kudlow think they have a winning issue — the Democrats are the party of higher taxes, the Republicans are the party of lower taxes, they will argue.
POLLS INDICATE THE PUBLIC wasn’t impressed with the 2017 tax cuts, which are generally viewed as a give-away to the wealthy and big corporations. But the contrast of sweeping tax hikes from the Democrats, compared to proposed tax cuts from Trump, apparently is a calculation Republicans are willing to accept. Besides, if Trump wins re-election, the new tax cut package Kudlow is assembling will be out of the gate fast in 2021.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Asset Management (Asia) Limited (AGF AM Asia) and AGF International Advisors Company Limited (AGFIA). AGFA is a registered advisor in the U.S. AGFI is registered as a portfolio managers across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. AGF AM Asia is registered as a portfolio manager in Singapore. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
© 2020 AGF Management Limited. All rights reserved.