Panetta's Pentagon Challenge

Over the past decade, the Pentagon has been run by a bully, a bureaucrat and, soon, a budget-cutter. Former defense secretary Donald Rumsfeld and incumbent Robert Gates had their pluses and minuses, but neither could wield a budget scalpel like Leon Panetta, who President Obama is slated to nominate as the nation's 23rd defense secretary on Thursday.

He's showing up – Gates is slated to step down June 30 -- just in time. Two weeks ago, Obama ordered $400 billion in additional defense spending cuts. That stung Gates, who has worked long and hard over the past two years to head off such chops by taking the initiative and trying to slow down the growth in Pentagon spending on his own. Given the mood in the country, and on Capitol Hill, Panetta's marching orders are tough: wrap up Iraq, finish Libya, and prevail in Afghanistan – all while cutting military spending.

Given that background, that exhale you heard from the Pentagon E-Ring was Gates' sigh of relief as it became clear that current CIA chief Panetta will be moving into Gates' Pentagon office. Gates had been eager to leave the Defense Department when the Bush Administration came to an end in early 2009. He only stayed after Obama made a personal appeal that Gates stay on, making him the lone defense secretary in history to be kept in the post by a newly-elected President.

Obama's also moving Army General David Petraeus to fill Panetta's job at the CIA, although Petraeus would retire from the military before assuming the intelligence post in late summer. This does more than burnish Petraeus' already-sterling national-security credentials. It also sidelines a wily, and highly-regarded, general who could threaten Obama's re-election if he, as some believe, opted to retire and end up as the Republicans' vice-presidential choice next year. Obama plans nominate Marine Lieut. General John Allen, the current No. 2 officer at U.S. Central Command, to succeed Petraeus. He also plans to tap retired diplomat Ryan Crocker to follow Karl Eikenberry, himself a retired three-star Army general, as Washington's next ambassador to Afghanistan.

While Panetta has little military experience beyond two years as an Army second lieutenant in the mid-1960s, he was involved in key national-security issues as head of the Office of Management and Budget, and later White House chief of Staff, during the Clinton Administration. After working for Republican officials and the Nixon Administration, he became a Democrat in 1971. Five years later, he was elected to Congress from Monterey, Calif., and re-elected eight times. He's known as someone who tilted in favor of Vice President Joe Biden's drone-and-special-forces emphasis for dealing with Afghanistan, instead of the troop-heavy option favored by Petraeus.

Always a centrist, Panetta has received good marks for his tenure at the CIA. "Director Panetta has the gravitas and experience to fill the big shoes Secretary Gates is leaving behind, while," says John Nagl, a retired Army officer who worked for Petraeus and now helps run the Center for a New American Security think tank in Washington. "General Petraeus will bring a broad and deep understanding of the wars we're fighting to the top levels of the agency."

Christopher Preble of the libertarian Cato Institute wonders if Panetta will make the tough choices Preble thinks are needed. "Bob Gates effectively shielded the Pentagon from spending cuts, but that merely postponed the reckoning that Panetta will have to confront," he says. "It remains to be seen whether Panetta will tackle this challenge." And he's leery of Petraeus' nomination. "Petraeus has focused nearly all of his energies over the past nine years trying to perfect the U.S. military's ability to fight wars that most Americans now wisely oppose," Preble says. "We should be putting these wars that sap our nation's strength and undermine our security in the country's rearview mirror.

Part of Panetta's new job will be to convince the Pentagon hierarchy to accept the inevitable coming cuts. Navy Secretary Ray Mabus on Wednesday gave little indication that he's ready for such fundamental change. As the civilian leader responsible for manning, training and outfitting the Navy and Marine Corps, those services' military commanders take their cues from him.

Mabus hedged when asked if the $400 billion in cuts President Obama has ordered come from security spending over the next 12 years can come without scrapping some long-standing missions. He cited various efficiencies, the creation of an anti-fraud task force, and replacing super-costly weapons with merely costly ones as examples of his budget stewardship. "I do think America needs to be a global power, I do think America needs to be forward deployed," he said. "We have global responsibilities, and I think we should meet those."

Asked point-blank if he had recommended scrapping any Navy or Marine missions since Obama called for the cuts, Mabus came clean: "I have not recommended any missions for jettisoning," he said. "But I have recommended platforms and people for cuts." But it's missions, of course, that drive the budget. Platforms and people simply carry them out, and if the missions remain in place, there is only so much that can be trimmed while still be able to do them.

Yet Panetta might be just the guy to do such heavy lifting. At least he gave that impression when he ran the House Budget Committee during his last years in Congress:

The Cold War is over, and yet there is a continuing push for new and better weapons systems, even as these changes in the world take place. We are looking at the possibility again of continuing to modernize our weapons systems, and it always seems that when we do that, it costs twice as much. We are buying a new attack submarine. Starting work on a new...F-22 fighter for the Air Force, and proposing to buy more B-2 bombers and designing a new tank for the Army. Not to mention a hefty increase for the Strategic Defense Initiative.

He said that in July 1991, and elaborated. "With the threat of world war-sized confrontation receding, can we streamline the military even more?" he asked, after the fall of the Berlin Wall and nearing the end of the Soviet Union. "Can we find a real peace dividend to devote to our desperate needs here at home and to reduce the deficit and our defense budgets?"

Sound familiar? It's a safe bet Panetta knows that defense spending today is higher than it was during the Cold War. The key question is whether he'll conclude that existing U.S. plans to keep it there are justified, or not.