President Donald Trump said last week he was recommending the Stockbridge businessman for the position, which helps set the nation's monetary policy. The seven-member Fed board has two vacancies. In addition to Cain, Trump has said he plans to appoint Stephen Moore, founder of the Club for Growth.
The board has a reputation for being independent and apolitical, often in the face of presidential displeasure.
Sen. John Thune of South Dakota, the Senate GOP's top vote counter, told Politico "there are concerns that are being voiced to the administration about (Cain's) qualifications."
Several other Republican senators, including Mitt Romney of Utah and Kevin Cramer of North Dakota, were also quoted casting doubt on Cain’s confirmation chances. A spokeswoman for Cain this week told the Atlanta Journal-Constitution that he was declining interview requests.
The 73-year-old previously served as chairman of the Kansas City branch of the Federal Reserve before returning to Georgia to attempt a political career. Those efforts included an unsuccessful bid for U.S. Senate in 2004 and a failed campaign to be the 2012 Republican presidential candidate. After ending his radio program on News 95.5 and AM 750 WSB last summer, Cain went on to co-found a pro-Trump super PAC.
Since then, he has frequently posted on social media and appeared in video segments in which he stands, wearing headphones and facing the camera. Behind him on his left is a portrait of Ronald Reagan, on his right an American flag. In the foreground is a model of the Statue of Liberty.
Cain is currently undergoing a background check. Trump on Wednesday said he didn’t know about Cain’s status but indicated it would be up to him to decide whether he wants to continue forward with the confirmation process in the face of GOP resistance.
“Well, I like Herman Cain, and Herman will make that determination,” Trump told reporters. “Herman is a wonderful man. He’s been a supporter of mine for a long time. He actually ran a very good campaign.”
Cain needs to win over 50 senators to be confirmed. With Democrats unlikely to provide any votes, Cain can only afford to lose three Republicans to keep his nomination afloat, assuming Vice President Mike Pence would cast a tie-breaking vote.
Georgia U.S. Sen. Johnny Isakson, who defeated Cain for the GOP Senate nomination in 2004, declined to share his thoughts on his former opponent’s Fed nomination on Tuesday. Georgia Republican David Perdue has signaled that he will stick by Cain.
Senate Majority Leader Mitch McConnell was noncommittal. “Well, we’re going to look at whoever (Trump) sends up, and once he does, we’ll take a look at it,” the Kentucky Republican told reporters Tuesday.
While Cain is not speaking with reporters, his recent online posts include arguments against a higher minimum wage, warnings about the danger of believing everything on the Internet and dismissals of "lunatic liberals." He also made several references to the possibility that he will be named to the Fed, and the controversy that news triggered.
“Because I ran as a Republican for president and the U.S. Senate and because I am an outspoken voice for the Constitution and the laws, I’m being attacked and because President Donald J. Trump happens to value my words and our friendship – so I’m going to be attacked.”
Criticism of his potential appointment is political, he said. “They don’t mention that I used to serve on the regional Federal Reserve Board.”
Critics say those positions had little to do with policy. The Kansas City Fed’s board is typically made up of business executives, not monetary policy experts. Cain joined the regional board after a successful business career. He rose through the ranks at Pillsbury and was named chief executive of Godfather’s Pizza.
Cain is now being considered for a national Fed position in which he would have a direct say in setting interest rates. Cain's resume is starkly different from the historical practice of appointing bankers, financiers and well-respected economists to those positions.
Besides having run for office, Cain, like Moore, has been a vocal booster for President Trump.
"The Federal Reserve's independence is under attack," wrote Tim Duy, a University of Oregon economist and long-time Fed watcher. "The idea that Fed governors should be political partisans is now out in the open."
The precedent is troubling, he said. “If President Trump is successful at packing the Fed with political partisans, there may be nothing to stop the next president from doing the same.”
Despite Cain’s Fed roles, Duy said Cain has shown little grasp of monetary policy: During his presidential campaign, Cain called for a return to the gold standard, a fringe position. And he argued for higher interest rates through 2017.
Many conservatives have been critical of the Fed, but even Fed critics question Cain's qualifications, said Desmond Lachman, economist and fellow at the American Enterprise Institute, a right-of-center think tank.
“This should be a neutral body, but there’s no pretense here,” Lachman said. “There is only one real qualification and that is being a Trump loyalist.”
The members of the Fed board are part of the Fed's Open Market Committee, which sets benchmark interest rates.
Control of interest rates is crucial, since it sets the terms for borrowing money. Higher rates tend to slow the economy: The higher the rates, the more it costs to borrow and the less inclined businesses and consumers are to make investments. On the other hand, "easy money" tends to spur growth but can fan too much risk-taking.
After a series of rate hikes, the Fed this year announced it would hold rates steady and watch the data. But that may not be good enough for the president, who has called for the Fed to do more to stimulate the economy.
All presidents prefer lower rates, especially as re-election approaches, Lachman said. “The risk is that if you cut rates when you don’t need to, that it puts us on the road to overheat the economy and you get inflation.”
The Atlanta Journal-Constitution and WSB are both owned by Cox Media Group.