By Peter Baker
Tan and ruddy-faced, Defense Secretary Leon E. Panetta took his seat in a hearing room one morning this month ready for battle. The enemy, he warned lawmakers ominously, was "a blind, mindless" one that could "badly damage our capabilities" and "truly devastate our national defense."
Mr. Panetta meant not Al Qaeda, the Taliban or Iraqi insurgents, but a creation of Congress poised to inflict what he deemed unacceptable budget cuts on a Pentagon that, he admitted, had "a blank check" in the decade after the attacks of Sept. 11, 2001.
"After every major conflict -- World War I, World War II, Korea, Vietnam, the fall of the Soviet Union -- what happened was that we ultimately hollowed out the force, largely by doing deep, across-the-board cuts that impacted on equipment, impacted on training, impacted on capability," he said. "Whatever we do in confronting the challenges we face now on the fiscal side, we must not make that mistake."
As President Obama's C.I.A. director, Mr. Panetta oversaw the raid that killed Osama bin Laden last spring. Now as the president's new defense secretary, he is charged with closing the books on multiple fronts -- just last week, Col. Muammar el-Qaddafi was killed in Libya and the last American troops were ordered home from Iraq by the end of the year. But the biggest challenges ahead may be retrofitting the military for a new era of austerity and guarding Mr. Obama's national security flank heading into a turbulent election year.
"It is one of these watershed points," said former Senator David Boren, co-chairman of the President's Intelligence Advisory Board. "It's just like the end of the cold war when you're about to shift gears and we're going to have to reprioritize what we have to do."
The daunting task has fallen on Mr. Panetta, a 73-year-old former civil rights chief, congressman, budget director and White House chief of staff whose career dates to the days of President Lyndon B. Johnson. Returning to Washington from his California walnut farm in 2009, Mr. Panetta knew little of fighting wars. What he did know was Washington institutions, a trait that made him a throwback to the so-called wise men commanding respect across party lines. Who else these days is confirmed 100 to 0 by the Senate?
But you don't get to 100 to 0 without compromise or evolution. The cold war dove who opposed Ronald Reagan's contra war in Nicaragua in the 1980s and George Bush's Persian Gulf war of 1991 has become a war on terror hawk, authorizing more drone strikes in Pakistan than George W. Bush.
The critic who denounced torture during Mr. Bush's tenure took office and argued against investigating whether it happened. The co-author of the Iraq Study Group report calling for withdrawing troops recently pressed to keep more troops there.
The careful positioning has made Mr. Panetta one subject on which Mr. Obama and many Republicans agree. "I'm a Leon Panetta fan," said former Representative
Pete Hoekstra, who is no Obama fan. "He's fairly hawkish and aggressive on national security issues," agreed Representative Mike Rogers, the House intelligence chairman.
Representative Peter King, the homeland security chairman, said Mr. Panetta could have served "the toughest Republican president, not just a Democratic president."
How long that lasts, of course, remains uncertain. He is treading into dangerous territory as he searches for $450 billion in defense cuts over 10 years. If a new Congressional debt committee cannot forge a deficit-reduction agreement by Thanksgiving, Mr. Panetta faces what he calls a "doomsday mechanism" mandating an additional $500 billion in cuts.
The issues on the table are enormous -- the financial health of a debt-ridden country, military readiness to confront a still-dangerous world and many thousands of jobs and contractor businesses in Congressional districts around the country. The political crosscurrents are treacherous for a party so sensitive to its public standing on security that Mr. Panetta is the first Democrat to serve as defense secretary since 1997.
While Tea Party Republicans on Capitol Hill and some of the party's presidential candidates call for significant defense cuts -- a position that would have been unthinkable just a few years ago -- many Republicans still oppose slashing military spending.
Moreover, Mr. Panetta faces a kaleidoscope of interests within his own building, where officers have mastered the art of lobbying for their own programs, resisting cost-cutting lawmakers and wearing down defense secretaries. Will this time be different or has a war-weary electorate changed the dynamics?
"He's going to preside over some very tough decisions," said former Representative Jane Harman, a Democrat now directing the Woodrow Wilson International Center for Scholars. "Budget cutting done wrong could be devastating for our national security, so the stakes are huge."
No one understands better than Mr. Panetta. "The real test for the country, as well as for the administration," he said over a breakfast of scrambled eggs and bacon in his Pentagon office, "is going to be whether or not ultimately we can't deliver on trying to solve the economic issues, but also deliver on the issues that I'm involved with in terms of war and peace."
The Five Rules of Panetta
To figure out how Mr. Panetta has survived so long in a town that chews up others, start by listening to him talk. He has a joyfully foul mouth. When he traveled to Afghanistan and Iraq last summer, he used 18 curse words in a single troop talk and caused a stir by telling Iraqis dawdling over a tough issue to "damn it, make a decision." Asked about his candor by NBC News, Mr. Panetta said jovially: "Hey, I'm Italian. What the frick can I tell you?"
If the salty language makes him earthy, it is the infectious laugh that has eased his way through 45 years of public life. When Pentagon stenographers transcribed a recent interview, they dutifully recorded "laughs" or some variation 33 times, plus four "chuckles." He laughed his way through a guest judge stint on "Top Chef," and during his Pentagon swearing-in joked about installing a seven-second delay in his microphone, "but I can't imagine why the hell that would be necessary."
Mr. Panetta's journey had its twists. A son of Italian immigrants from Monterey Calif., Mr. Panetta came to Washington in 1966 as a Republican and became director of the Office for Civil Rights until his aggressive enforcement of desegregation prompted President Richard M. Nixon to fire him. Returning home, he switched parties and ran for Congress in 1976, rising to chairman of the House Budget Committee before being tapped as Bill Clinton's budget director and later chief of staff.
"He was a major contributor to the success that my husband had," Secretary of State Hillary Rodham Clinton said in an interview, recalling the deficit reduction package he helped negotiate that paved the way for a balanced budget. "He is a problem solver, a strong leader and manager. He also calls it like he sees it."
Jennifer Palmieri, a former longtime aide, said Mr. Panetta has a straightforward formula for survival in Washington. She has packaged them into what she calls The Five Rules of Panetta:
¶"You can't slam dunk anyone." Work with opponents.
¶"Any [expletive] can burn down a barn; it takes a leader to build one."
¶"He who controls the paper controls the outcome."
¶"Never let them see you sweat."
¶"In a negotiation, take what you can get. And then come back for more."
Those negotiating skills will prove critical as he guides another president on federal spending while jousting with other security agencies, including his former agency, the C.I.A., over a shrinking pie. "He'll be particularly well suited to take on the budget challenges at the Pentagon," Mrs. Clinton said.
The decisions Mr. Panetta makes -- whether cutting an aircraft carrier, scaling back the F-35 Joint Strike Fighter or paring back expensive health care costs for active and retired service members -- could determine if the military can still fight two land wars simultaneously, confront new types of high-tech warfare and fulfill promises to those who risked lives for their country.
Pentagon critics argue deep cuts would simply trim bloat. Military spending has doubled since the Sept. 11 attacks, to $688 billion from $316 billion, with 1.4 million men and women currently in uniform. Even excluding the costs of the Iraq and Afghanistan wars, the base budget has increased 78 percent in 10 years. Yet much of that growth has benefited districts of lawmakers torn between taming the deficit and defending jobs and businesses back home.
"That is where his contacts on the Hill will pay off," said Bruce Riedel, who led an Obama administration review of Afghanistan. "But he's still going to have to tell the services that they'll have to do with less money."
Surprise Pick for C.I.A.
If Mr. Panetta's warnings about defense cuts have won favor among generals, they fit a pattern of adapting to whatever institution he runs. He arrived at the Central Intelligence Agency in 2009 with little experience in spycraft, yet won over a building of people suspicious of outsiders.
Even Mr. Panetta considered himself a surprising pick to run the C.I.A. When John Podesta, who ran the Obama transition, called to broach the idea, Mr. Podesta recalled, "I get cold silence. And then finally he said to me, "You're kidding, right?' "
Mr. Podesta initially considered him for deputy defense secretary, essentially heir apparent to the holdover secretary, Robert M. Gates. But Rahm Emanuel, then the incoming White House chief of staff, suggested the C.I.A., figuring Mr. Panetta could "calm the place down" after a decade of turmoil. "I told the president it would be a risk because it wasn't what the Washington oh-so-wise people expected," Mr. Emanuel said from Chicago, where he is now mayor.
He was right about the reaction. Senator Dianne Feinstein, a Democrat and Senate intelligence chairman, called it ridiculous to appoint an intelligence novice. But she, like others, changed her mind as Mr. Panetta improved agency morale and rebuilt relations with Congress. "It was a real revelation for me because I thought the C.I.A. had to be C.I.A.," she said.
Mr. Panetta wooed lawmakers with coffees, dinners and access. Last January, he hosted Mr. Rogers, the new Republican intelligence committee chairman, for chicken dinner and confided they might have found Bin Laden. Being brought into the loop made a difference. "He would have had an ally had it gone bad," Mr. Rogers said.
Mr. Panetta, who in 2008 criticized Mr. Bush for turning America into "a nation of armchair torturers," became a champion of the C.I.A. within the Obama administration. His advocacy of a truth commission vanished and he insisted on redacting legal memos authorizing harsh tactics. At various points, he took on the White House counsel, the attorney general, the director of national intelligence and the Democratic House speaker.
When Attorney General Eric H. Holder reopened investigations into whether C.I.A. officers had gone beyond the memos, Mr. Panetta protested in four-letter fashion.
"Leon had a different view and expressed this view to me in very candid circumstances," recalled Mr. Holder, who eventually dropped inquiries in all but two cases.
Those who saw Mr. Panetta as a reformer were disillusioned. "It was so disappointing to me," said Ilana Sara Greenstein, a former C.I.A. officer and a vocal agency critic. "I felt like early on he just became co-opted."
George Brent Mickum IV, who represents the Guantánamo Bay detainee Abu Zubaydah, who was waterboarded 83 times, recalled Mr. Obama's campaign statements. "He has essentially reneged on all of these promises," he said, adding that Mr. Panetta "ran interference for those who potentially could have been accused of war crimes."
Michael Morell, the deputy C.I.A. director, rejected the criticism. "Believe me, the place did not co-opt him. He co-opted the place," Mr. Morell said. Mr. Panetta said re-examining the Bush era would be distracting. "If I'd spent my time persecuting people for the past, I would have never been able to have gotten any traction to move forward with what I wanted to achieve," he said.
His tenure was capped by the Bin Laden raid. A friend, Ted Balestreri, co-owner of Monterey's Sardine Factory restaurant, had dared him to find Bin Laden, vowing to open an 1870 bottle of Château Lafite Rothschild, priced at $10,000, if he did. Four months later, Mr. Panetta called his wife, Sylvia, in California. "Call Ted," he said, "and tell him he owes me that bottle of wine."
An Obvious Choice
That might have been the moment to go out on top. But Mr. Obama had one more assignment. Of 15 names Thomas E. Donilon, the national security adviser, presented to succeed Mr. Gates, Mr. Panetta was the obvious choice. "What presidents really value is coming down on the issue, and Leon comes down," Mr. Donilon said. "There's not a lot of "on the one hand, on the other hand.' "
Mr. Panetta was reluctant. He would be history's oldest incoming defense secretary. The walnut farm beckoned. "I asked myself the same question -- why would he continue?" Sylvia Panetta recalled. "Leon is loyal. When the president asks, you do what you have to do."
Mr. Panetta has not shown his hand about how he plans to transform the military or his vision for what war will look like in the future. But his very appointment signaled the growing integration of intelligence and armed forces. During his 28-month tenure at the C.I.A., Mr. Panetta authorized drone strikes about 200 times, underscoring the evolution of warfare.
In a world of diffuse threats -- rather than a cold war, he says America faces a "blizzard war" of myriad challenges -- Mr. Panetta is the one with his finger on the trigger. And nothing prepared this Catholic school student and antiwar liberal for ordering someone's death in the middle of the night.
"I suddenly realized at the C.I.A. that I had to make life-and-death decisions about people," he said on his plane heading to Afghanistan last summer. "In many ways, it was life-and-death decisions about an enemy who we were confronting. In this job," he added, "I have to make life-and-death decisions about our people." Either way, he said, "I've said more Hail Marys in the last two years than I have in my whole life."
A few weeks later, he flew to Dover Air Force Base to honor 30 service members killed in Afghanistan. In his office the next morning, Mr. Panetta was in a somber mood, recalling a father who lost his boy and thinking of his own son James, a Navy reservist who earned a Bronze Star in Afghanistan. "You see those dreams that are kind of crushed," he said. "And it brings home how big a sacrifice people make in war."
Asked about inspirations, Mr. Panetta nodded toward portraits of Dwight D. Eisenhower and George Marshall. "These two guys were always, you know, kind of heroes of mine," he said. "So every once in a while, I turn around in that chair and look at them and say, you know, what the hell would you do?"
He laughed. "The problem is," he said, "they're not talking back."