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.
Bush selected Leavitt, the Environmental Protection Agency chief, on Monday, filling one of the last two openings in his second-term Cabinet. Bush praised 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."
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 percent 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.
Michael Leavitt also has small stakes in pharmaceutical makers Johnson & Johnson and Merck & Co., and in medical equipment maker Medtronic Inc. Each investment was worth less than $15,000, according to the 2003 disclosure.
White House spokesman Trent Duffy said, "We're confident that Gov. Leavitt will take the necessary steps to avoid any conflicts of interest."