Leavitt shifts Cabinet post

WASHINGTON – Michael Leavitt, President Bush’s choice to become secretary of health and human services, may have to cut billions of dollars from the government’s 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, could be vulnerable given last year’s $413 billion budget deficit, the Iraq war, domestic security needs and Bush’s plans to revamp Social Security without tax hikes.

Bush selected Leavitt, the U.S. Environmental Protection Agency chief, on Monday, filling one of the last two openings in his second-term Cabinet. Leavitt, Utah’s governor for 11 years before joining the administration last year, would succeed Tommy Thompson if confirmed.

Before becoming governor, Leavitt 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 last year.

The firm owns 100 independent insurance agencies that sell supplemental Medicare policies and other insurance products, according to company literature. The Medigap policies account for less than 1 percent of revenues, said Chief Executive Officer Dane Leavitt, the nominee’s brother.

Bush still must name a new head of homeland security to replace Bernard Kerik, who withdrew Friday, citing immigration problems with a family housekeeper.