From a sell side research desk.
IMPEACHMENT IS HIGHLY UNLIKELY
It is almost inconceivable and bordering on delusional that GOP majorities in Congress will impeach President Trump based on what we know today or any reasonable inferences from what we know today. The real risk of these controversies for Trump is they bog down his agenda and the GOP loses its majorities in Congress (particularly the House), which would mean hostile congressional investigations for the rest of his term.
We have been reluctant to write about impeachment, but it keeps coming up in client meetings, so we address it in today's report. To be frank, we have found much of the discussion of impeachment to be divorced from reality. Nothing close to what we know today would prompt Republican majorities in Congress to remove a Republican president only months after he has taken office. Let's consider two recent parallels before getting into the Trump-related controversies specifically.
In 1998, the House (which Republicans controlled at the time) voted to impeach President Bill Clinton. Of the four articles the House voted on, two passed. It is virtually indisputable that Clinton lied under oath and obstructed justice. Nonetheless, only five House Democrats voted for some of the articles of impeachment. In the Senate, no Democrats voted to convict and a number of Republican senators voted against conviction, which would have removed Clinton from office. So almost every Democrat voted with the president even though he was obviously guilty of those crimes. For nearly all Democrats and some Republicans, those crimes (lying about and covering up an extramarital affair) were not a sufficient basis for removing the president from office.
In early 2011, shortly after taking office, Wisconsin Gov. Scott Walker pursued a controversial agenda, including taking away the ability of most public sector unions to organize. Organized labor and progressive groups initiated a recall of Walker. Even though Walker was not especially popular, he won the recall handily, in part because some independent voters that did not necessarily support him or his agenda were strongly opposed to what they perceived as an anti-democratic recall campaign that was designed to reverse the election outcome that had taken place only two years before (and was initiated less than a year after Walker took office).
President Trump took office a little more than four months ago and was elected just less than seven months ago. The American people knew they were voting for a person with major shortcomings. One reason he won the GOP nomination and the presidency is that many voters are livid at their leaders in Washington – including many GOP voters who are angry at their own GOP leaders. The idea of removing Trump from office is going to strike tens of millions of Americans, including the vast majority of Republicans, as utterly outrageous.
So what would be the basis for doing so? What precisely is the crime that will cause a GOP majority in the House to impeach and the Senate majority to convict, thereby removing Trump from office? Put another way, what is the article (or articles) of impeachment going to say?
To be sure, it is possible the Russia-related and other controversies surrounding Trump will have devastating political consequences. In fact, we would argue Trump's presidency is off to an awful start and that Republicans ought to be deeply concerned about the outlook for the 2018 midterm election. And if the GOP did lose its majority in the House, the Trump administration might be under siege from hostile congressional investigations.
But right now the House is in Republican hands. The threshold for the House to vote to impeach the president is an incredibly high one. What is the precise crime he is guilty of that Republican officeholders would conclude merit his removal from office?
Suppose for the sake of argument that we are omniscient and know it is a fact that Trump pressured FBI Director Comey to drop his investigation of Michael Flynn. Suppose further that Comey testifies accordingly next week. Trump denies the conversation took place. By Comey's account (according to press stories), they were the only two people in the room. We know of no other action President Trump or anyone in his administration took to shield Flynn from an FBI investigation.
So to summarize: Comey says Trump asked him to drop his investigation of Flynn. Trump says he didn't. Even if Trump did, it is debatable whether it is obstruction of justice. What are the odds the GOP is going to draft articles of impeachment based on that charge? Approximately zero.
In terms of colluding with the Russians, suppose evidence comes to light that proves the Russians gave Paul Manafort, a one-time top Trump campaign aide, a peak into the emails that US intelligence agencies believe the Russians eventually gave WikiLeaks. (To be clear, there is no evidence this happened.) This would be a huge political scandal. But would the GOP initiate an impeachment process? What precise crime would the president have committed that would be the basis of an impeachment charge and removing him from office?
The Trump team's behavior regarding Russia seems odd and has us scratching our heads. The controversy doesn't seem likely to go away and it could have important negative political consequences.
But the American people are likely to be deeply skeptical of talk of impeachment. Republican members of Congress who would entertain the idea would almost certainly face a rebellion from their own GOP voters back home. It's also worth noting that only fringe Democrats are talking about it. Nancy Pelosi has warned Democrats not to throw around the word impeachment. She knows that the best way for Democrats to reduce the odds they will take back the House is to make the 2018 elections a referendum on impeaching President Trump.