Bush Taps EPA Chief To Lead Overhaul of Department of HHS

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WASHINGTON – Michael Leavitt, President Bush’s choice to be secretary of Health and Human Services, may have to cut billions of dollars from the government’s mammoth health programs for the elderly, poor, and disabled to pare the budget deficit.


The Medicare and Medicaid programs, consuming nearly $500 billion a year and growing quickly, could be vulnerable in the context of last year’s $413 billion budget deficit, the ongoing war in Iraq, costly domestic security commitments, and administration plans to revamp Social Security without raising taxes.


Mr. Bush selected Mr. Leavitt, the Environmental Protection Agency chief, yesterday, filling one of the last two openings in his second-term Cabinet. Mr. Bush praised Mr. Leavitt as a “fine executive” and “a man of great compassion … an ideal choice to lead one of the largest departments of the United States government.”


Mr. Leavitt, Utah’s governor for 11 years before joining the administration in late 2003, would succeed Tommy Thompson if confirmed by the Senate.


Before becoming governor, he was chief operating officer of the Leavitt Group, a family insurance firm in which he maintains an investment worth between $5 million and $25 million, according to a financial disclosure report he filed in 2003.


The company owns 100 independent insurance agencies that sell supplemental Medicare policies, among other insurance products, according to company literature.


The Medigap policies account for less than 1% of company revenues, said Dane Leavitt, the president and CEO. He is Michael Leavitt’s brother.


“I have never had a discussion with him on any of those topics and I don’t anticipate having one,” Dane Leavitt said.


White House officials did not immediately comment on Mr. Leavitt’s investments.


Meanwhile, John Walters, the national drug policy director, will stay in his post, White House officials said.


Mr. Bush still must name a new head of the Homeland Security Department to take the place of Bernard Kerik, who abruptly withdrew Friday night, citing immigration problems with a family housekeeper.


“He himself said he should have brought it to our attention sooner,” said a White House spokesman, Scott McClellan. “Commissioner Kerik pointed out that this was a mistake.”


After failing to disclose the nanny problem during an initial screening, Mr. Kerik acknowledged it during a subsequent vetting phase as he filled out a clearance form, Mr. McClellan said.


Among the names mentioned as possible candidates for the post are Asa Hutchinson, the department’s undersecretary for transportation and border security; White House homeland security adviser Fran Townsend; White House deputy chief of staff for operations Joseph Hagin, and Robert Bonner, commissioner of U.S. Customs and Border Protection.


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