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Cain's possible Fed nomination in peril as Republican opposition mounts

Kitco News

Trevor Hunnicutt

WASHINGTON (Reuters) - President Donald Trump’s expected nomination of former pizza chain executive Herman Cain to the Federal Reserve appeared in jeopardy on Thursday after a fourth Republican senator voiced opposition, possibly denying Cain the support needed to be confirmed in the post.

“If I had to vote today, I would vote no,” Senator Kevin Cramer said in an emailed statement.

If all of the Senate’s Democrats and the two independents aligned with them were to vote against Cain, he would fall short of the majority support he needs.

Cain could not be reached for comment.

Senators Mitt Romney, Lisa Murkowski and Cory Gardner, all Republicans, have each reportedly said they would vote against Cain if he is nominated. Senate Majority Leader Mitch McConnell on Thursday withheld comment on whether he would support Cain, saying he will wait to see “who is actually nominated.”

Economists and critics have expressed concerns about loyalists of Republican Trump serving on the traditionally nonpartisan central bank.

Cain has been a public advocate of many of Trump’s policies, as has Stephen Moore, another person Trump has said he wants to nominate. Neither nomination has been formally sent to the Senate.

On Facebook earlier this week, Cain said the reason he was under attack as a nominee is because he is a conservative. Cain’s bid for president in 2012 was derailed by accusations of sexual harassment that he has repeatedly denied.

White House economic adviser Larry Kudlow said earlier on Thursday that Trump intends to proceed with his plan to name Cain to the Fed’s board of governors.

“I like Herman Cain,” Trump told reporters on Wednesday. “As to how he’s doing in the process, that I don’t know ... Herman is a great guy and I hope he does well.”

The president nominates members to the Fed’s seven-member board of governors. He elevated Jerome Powell to chairman a year ago but has frequently criticized him for the Fed’s interest rate increases.

The nominations must be approved by the Senate. Another 12 members of the Federal Open Market Committee, which sets interest rates, head regional banks and are chosen by local boards of directors, not the president.

Trump has slammed the central bank’s rate hikes in 2018 as thwarting economic growth and has publicly pressed policymakers to change course.

Central bank independence from short-term politics is seen as important to prevent influence that could lead to runaway debt and hyperinflation.

Reporting by Trevor Hunnicutt; additional reporting by Tim Ahmann, Richard Cowan, Howard Schneider and Jeff Mason; editing by Eric Beech, Grant McCool and Dan Grebler

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