Two administration officials told The Associated Press that Shulkin's position is growing more precarious and that he could be out of a job within the week, but cautioned that nothing was finalized. The officials spoke on condition of anonymity to discuss a sensitive personnel matter.
Shulkin, a former Obama administration official, has faced several investigations over his travel and leadership of the department. Until recently, he had received praise from President Donald Trump for his work to turn around the agency, but a raft of blistering VA watchdog reports detailing mismanagement and spending waste has weakened his standing.
The White House made clear Wednesday that Shulkin's job was not safe.
In recent weeks, Shulkin has faced an insurgency within his department and now faces fresh allegations that he used a member of his security detail to run personal errands. On Tuesday, two people familiar with White House discussions told AP that Trump viewed Shulkin as a distraction and floated the notion of moving Perry to the VA to right the ship. Trump fired Secretary of State Rex Tillerson Tuesday.
Speaking after a Senate hearing Wednesday, Perry said he isn't moving to VA and dismissed the reports as "fake news."
"I am energy secretary from now until the foreseeable future. Happily," he said.
Trump raised the idea with Perry on Monday but did not offer him the job, according to one White House official. Trump has been angry with Shulkin, the official said, but is known to float staffing changes without always following through.
The uncertainty over Shulkin's status has left the government's second largest department virtually paralyzed, with members of Congress confused over who's in charge and what's being done to improve care for 9 million military veterans in more than 1,700 government-run health facilities. For the most part, Republican and Democratic lawmakers are still standing behind Shulkin, viewing him as the best guardian of VA who would fend off Trump administration efforts to privatize VA care.
"The President needs to decide whether he is going to empower Secretary Shulkin to do his job," said Sen. Jon Tester of Montana, the top Democrat on the Senate Veterans Affairs Committee. "We need to know who's calling the shots."
"Dysfunction in the administration has hindered our ability to move forward," he added.
Shulkin did not respond to requests for comment via phone and text message. He has been holding on to his job by a thread since a bruising internal report found ethics violations in connection with his trip to Europe with his wife last summer. A spokeswoman for Perry also had no comment.
The VA inspector general also is looking into a complaint by a member of Shulkin's 24-7 security detail that he was asked to accompany the secretary to a Home Depot and carry furniture items into his home, according to two people familiar with the allegation who requested anonymity to discuss an ongoing investigation.
Within the agency, a political adviser installed by Trump has openly mused to other VA staff about ousting the former Obama administration official. And a top communications aide has taken extended leave following a secret, failed attempt to turn lawmakers against him.
"The honeymoon is ending with a crash that hurts veterans most of all," said Paul Rieckhoff, founder and CEO of Iraq and Afghanistan Veterans of America, who has been a close observer of VA for more than a decade. "VA always has bad news, but Shulkin's ethical and leadership failures are still significant - despite any internal attacks."
Senior administration officials describe a growing frustration that Shulkin repeatedly ignores their advice, only to beg for their help when he runs into ethical trouble. The officials, who spoke on condition of anonymity in order to describe sensitive internal discussions, say Shulkin has been given a final warning to end the swirl of distractions. The administration is currently seeking to push Trump's agenda of aggressively expanding the Veterans Choice program, which major veterans groups worry could be an unwanted step toward privatizing VA health care.
The issue came to the fore at a White House meeting last week, when chief of staff John Kelly told Shulkin to stop talking to the news media without clearing it first with the White House and to stay focused on fixing veterans care.
Shulkin was escorted from that meeting to the Oval Office, where Trump questioned him about his efforts to push the Choice expansion, which lawmakers are now seeking to include in a massive spending bill that must be approved by next week to avert a government shutdown.
Shulkin is blaming the internal drama on a half-dozen or so political appointees whom he had considered firing, only to be blocked by Kelly.
"I regret anything that has distracted us from what we should be focusing on, which is serving veterans," Shulkin told the AP shortly before release of an inspector general report that faulted the VA for "failed leadership" and an unwillingness or inability of leaders to take responsibility for accounting problems at a major VA hospital that put patients at risk.
It wasn't always this way.
Early in the administration, Shulkin was often seen at Trump's side. The president called him the "100-to-nothing man" - a reference to his unanimous Senate confirmation vote - and publicly teased that he probably would never be fired because he had successfully shepherded legislation to improve accountability at the VA and speed disability appeals.
By December, relations at the VA between Shulkin and several political appointees began to fray over philosophical differences.
Last month, the inspector general released a blistering report finding ethical violations in Shulkin's trip last July to Denmark and Britain that mixed business with pleasure. The IG found that Shulkin's chief of staff Vivieca Wright Simpson had doctored emails to justify his wife accompanying him at taxpayer expense. Wright Simpson retired after the report was issued.
Associated Press writers Catherine Lucey, Jonathan Lemire, Laurie Kellman, Matthew Daly and Darlene Superville contributed to this report.
Follow Yen on Twitter at https://twitter.com/hopeyen1 and Miller at http://twitter.com/@ZekeJMiller
Copyright 2018 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.