WASHINGTON \u2014 President Donald Trump said Monday that Herman Cain has withdrawn from consideration for a seat on the Federal Reserve\u2019s board amid a focus on past scandals and doubts about his qualifications for the role.<\/p>\n\n\n\n
Cain is a former CEO of Godfather\u2019s Pizza who dropped out of the 2012 presidential race as he faced allegations of sexual harassment and infidelity. The issues resurfaced after Trump said he intended to nominate Cain to the central bank\u2019s board of governors. <\/p>\n\n\n\n
Trump tweeted Monday that \u201cMy friend Herman Cain, a truly wonderful man, has asked me not to nominate him for a seat on the Federal Reserve Board. I will respect his wishes.\u201d <\/p>\n\n\n\n
Cain\u2019s nomination was all but doomed earlier this month when four Republican senators said they wouldn\u2019t vote to confirm him if he were nominated. The GOP holds just a three-seat majority in the Senate. Senate Majority Leader Mitch McConnell refused to say 10 days ago whether the chamber would confirm Cain. <\/p>\n\n\n\n
\u201cThere were so many things about (Cain) that were red flags,\u201d including his lack of understanding of monetary policy, said Diane Swonk, chief economist at Grant Thornton and longtime Fed watcher. Cain has served on the board of the Federal Reserve Bank of Kansas City but didn\u2019t participate in any interest rate decisions in that position. <\/p>\n\n\n\n
Trump is also considering conservative ally Stephen Moore for a separate vacancy on the Fed’s seven-member board.<\/p>\n\n\n\n
Senate Democratic Leader Chuck Schumer warned the Republicans against using Cain\u2019s withdrawal as a \u201cpathway\u201d to approval of Moore, calling him \u201cequally unqualified and perhaps more political.\u201d <\/p>\n\n\n\n
\u201cMr. Moore, like Mr. Cain, poses a danger to the economic stability of our country,\u201d Schumer, D-N.Y., said in a statement. \u201cMr. Cain clearly saw the writing on the wall and withdrew his name from consideration; hopefully Senate Republicans will again voice their deep concerns and force Mr. Moore to do the same.\u201d <\/p>\n\n\n\n
Trump\u2019s picks of Cain and Moore raised concerns about the Fed\u2019s ability to remain politically independent. Last fall, Cain co-founded a pro-Trump super political action committee, America Fighting Back PAC. It features a photo of the president on its website and says, \u201cWe must protect Donald Trump and his agenda from impeachment.\u201d <\/p>\n\n\n\n
The potential nominations surfaced after Trump spent months attacking his pick to lead the Fed, Jerome Powell, and other Fed officials for raising interest rates four times last year. Those rate hikes hurt the stock market and were unnecessary because there was no inflation threat, Trump has said. <\/p>\n\n\n\n
At a meeting in March, Fed policymakers indicated that they expected to keep rates unchanged this year, a sharp change from December, when they suggested that they would lift short-term rates two more times. <\/p>\n\n\n\n
The Fed board, along with presidents of the Fed\u2019s regional banks, plays a critical role in the U.S. economy, holding meetings to debate and vote on whether to raise their benchmark interest rate. That rate, in turn, affects everything from mortgage rates to the interest rate on auto loans and the interest paid on savings accounts. The Fed typically increases its benchmark rate when it worries inflation is about to accelerate, or cuts it to accelerate growth. <\/p>\n\n\n\n
Like Moore and Trump himself, Cain has criticized the central bank\u2019s policies. In a 2012 Wall Street Journal column, Cain argued that the Fed\u2019s low interest rate policies had distorted the value of the dollar. He advocated a return to the gold standard as a way to control inflation, a position that most economists disagree with. Many economic historians argue that the gold standard, which fixes the dollar\u2019s value to a specific amount of gold, worsened the Great Depression. <\/p>\n\n\n\n
Cain dropped out of the race for the 2012 Republican presidential nomination after allegations that he had engaged in sexual harassment when he led the National Restaurant Association in the 1990s. An Atlanta woman also said she had conducted an extramarital affair with Cain for more than 13 years. <\/p>\n\n\n\n
Cain called the allegations false but said he had \u201cmade mistakes in my life.\u201d <\/p>\n\n\n\n
Before leaving the race, Cain had proposed a \u201c9-9-9\u201d tax plan that called for replacing the current tax system with a flat 9 percent business and individual income tax, and a 9 percent sales tax. <\/p>\n\n\n\n
AP Writers Martin Crutsinger and Marcy Gordon contributed to this report.<\/i><\/p>\n","protected":false},"excerpt":{"rendered":"
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