Bush Holds Over 2 More in Cabinet, Picks Budget Chief : Att. Gen., Education Boss to Stay

WASHINGTON — President-elect George Bush reached again into the Reagan Cabinet today to retain Richard L. Thornburgh as attorney general and Lauro F. Cavazos as secretary of education. He also named former White House aide Richard G. Darman for “perhaps the most difficult job,” budget director.

Thornburgh and Cavazos, like Treasury Secretary Nicholas F. Brady, were late additions to the Reagan team. Bush told a news conference that “in all likelihood” those three will be the only direct holdovers.

At the news conference, Bush rejected a General Accounting Office report that dismissed his “flexible freeze” proposal for cutting the budget deficit. The report said tax increases as well as military and Social Security cuts would have to be considered.

“I’m not going to change my view as to how we get this deficit down,” Bush said. “I don’t remember any Republicans or Democrats running on a please-raise-my-taxes program.”

Darman, named to take over at the Office of Management and Budget, defended the flexible freeze, saying only Social Security would be exempt from its stringencies. He singled out medical programs as a prime target for savings in the Bush Administration.

‘A Big Challenge’

He said medical costs have been rising at two to three times the general rate of inflation for a couple of decades. “Just getting the costs in that area under control is a big challenge, but it’s also a big reward in terms of budget savings,” Darman said.

Darman, 45, was deputy White House chief of staff and then deputy Treasury secretary under James A. Baker III before taking a job with an investment firm last year. He has worked in six Cabinet agencies: Defense, Justice, Commerce, State, Treasury and Health, Education and Welfare.

Cavazos, Thornburgh and Brady join Baker whom Bush has chosen to be secretary of state, as cornerstone members of Bush’s new Cabinet. The President-elect said today, “I will keep my commitment to bring in lots of new faces.”

Bush swore in Cavazos, 61, the first Latino-American to serve in a Cabinet, in September as successor to William J. Bennett at the Department of Education. Bush had promised to appoint a Latino to his own Cabinet if elected.

Thornburgh, 56, former governor of Pennsylvania and one-time head of the Department of Justice’s criminal division, replaced the embattled Edwin Meese III in August. Bush said Thornburgh’s priority as the nation’s chief law enforcement officer will be “combatting the scourge of drugs.”

Talks With Dukakis

“Drugs are Public Enemy No. 1. A major part of Dick’s mission will be to stop them from damaging our society and our country,” the President-elect said.

Bush later telephoned the man he defeated in the Nov. 8 election, Democratic Gov. Michael S. Dukakis of Massachusetts. Dukakis aides said the two men spoke briefly about getting together but no date was set.

“I don’t want to have a lot of show business. I want to hold out my hand and say, ‘Look, the campaign is behind us,’ ” Bush said at a brief news conference after his appointment announcements.

Bush flies to Houston on Tuesday for two hours of meetings with President-elect Carlos Salinas de Gortari of Mexico, who is to take office Dec. 1. The vice president will stop on the way in Point Clear, Ala., at a Republican governors’ conference.

He said he will make clear in his meeting with Salinas “that I am committed to democracy in Central America.” He said the Sandinista government of Nicaragua has been “unwilling to take the steps toward democracy that I find absolutely essential if we are going to have harmony in Central America.”