The last time the Pentagon was forced to shrink, two decades ago, one of its nemeses was a determined deficit hawk named Leon E. Panetta.
As chairman of the House Budget Committee and later as budget director in the Clinton administration, Panetta was an unforgiving enforcer of the bottom line as the United States grappled with record-size debts. As the largest government agency, the Pentagon found itself a frequent target of his whip, especially as it struggled to justify its missions in the aftermath of the Cold War.
“I think the most dangerous threat to our national security right now is debt, very heavy debt, that we confront in this country,” Panetta lectured then-Defense Secretary Richard B. Cheney and Gen. Colin L. Powell, the chairman of the Joint Chiefs of Staff, during a hearing in 1992. “I don’t question anything you’re saying in terms of the role that this country ought to perform. My problem is how the hell are we going to pay for it?”
Today the shoe is on the other foot. After directing the CIA for 21 / 2 years, Panetta took over the Defense Department in July, shortly after President Obama said he would reduce national security spending by as much as $465 billion over a decade.
A month later, Congress and the White House announced a much heavier potential blow: as much as $600 billion more in defense cuts unless a special congressional committee can agree by December on another way to reduce the deficit.
Panetta, 73, knew the first hit was coming, but the second left the Pentagon in shock. The military brass had seen its annual budget roughly double since the Sept. 11, 2001, attacks and was unprepared for a decade-long reversal of fortune.
Since then, Panetta has led a full-throated campaign to resist what he says would be a “catastrophic” setback for national security. He has called the prospect of the extra $600 billion in cuts “a disaster” and a “crazy doomsday mechanism” that would “hollow out” the military with “a goofy meat-ax approach.” He has implied that he might quit if the Pentagon isn’t spared, saying: “It will not happen under my watch.”
His sharp rhetoric — including suggestions that lawmakers cut Social Security and Medicare instead of squeezing more out of the Defense Department — has turned heads in Washington, where some former colleagues wonder what happened to the exemplar of thrift they used to know.
“Apparently a mind-meld was performed on him, maybe while he was at the CIA,” said Rep. Barney Frank (D-Mass.), who said the Pentagon budget deserves a buzz cut. “Panetta used to boast about the accomplishments that he’s now demonizing. It’s just excessive. I cannot rationally explain it.”
In an interview, Panetta said he remains devoted to fiscal discipline. The Pentagon, he noted, has demonstrated that it is willing to sacrifice for the good of the country by accepting the first round of cuts.
But taking away $600 billion more, he said, would force an immediate and deep reduction in the armed forces when the United States is still at war in Afghanistan and confronting terrorists, Iran, North Korea and other threats.
“Frankly, my fundamental beliefs have not changed,” said Panetta, the first Democrat to lead the Pentagon since William J. Perry resigned in 1997. “Throughout the 40 years I’ve been in Washington, I’ve always worked hard, particularly with regards to the budget issues. Frankly, I never thought that this country would be careless enough to put itself into deep deficits again and have to face all of these difficult choices that we’re facing now.”
When he ran the House Budget Committee, Panetta was an instrumental player in the deficit-control pact that Democrats negotiated with George H.W. Bush in 1990, forcing the president to renege on his “Read my lips: no new taxes” oath. Three years later, Panetta was the architect of President Bill Clinton’s first budget, which was bitterly contested but led to years of surpluses.
As budget director, Panetta worked out of an office near the White House that had been formerly assigned to the secretary of war. He ruthlessly held agencies to their spending targets. When Defense Secretary Les Aspin complained that the Pentagon had been shortchanged $50 billion, Panetta dressed him down in public. Aspin, already wobbly after a series of other missteps, resigned soon after.
Panetta’s approach won him few friends in the Defense Department. In December 1993, syndicated columnist Jack Anderson wrote that Aspin’s replacement as Pentagon chief would have to confront a “daunting array” of adversaries: “North Korea, Iraqi President Saddam Hussein, Somali warlords, Haitian military rulers and Leon E. Panetta.”
Panetta said he was just doing his job at the Office of Management and Budget, carrying out orders from the top.
“As OMB director, working with the president, I mean it wasn’t Leon Panetta, it was Bill Clinton who made the decisions on what the budget would consist of,” he said. “My responsibility there was obviously to try to make sure that we did what the president wanted to achieve.”
Since taking over as defense secretary, Panetta has warned against blindly shrinking the military just because U.S. involvement in Iraq and Afghanistan is waning. “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,” he told a House committee Oct. 13.
In his public statements, however, Panetta has omitted the role he played at the end of the Cold War, when the Pentagon saw its budget slashed by nearly a quarter from 1989 to 1994.
Despite his disavowal of that period, some Democrats and defense analysts say Panetta and Clinton got it right, that the post-Cold War cuts forced the Pentagon to become more efficient without compromising national security.
“The build-down of the 1990s was the best managed build-down in Pentagon history,” said Gordon Adams, a foreign policyprofessor at American University who worked under Panetta at the Office of Management and Budget. “We did not get it wrong.”
Analysts said it’s hardly surprising that Panetta, as defense secretary, would champion the Pentagon’s interests. They said he has smartly tried to win over the Joint Chiefs so the military can present a unified front against further cuts.
In the coming months, however, he will have to navigate competing interests as each of the services fights to preserve its respective pot of money, said Andrew F. Krepinevich, president of the Center for Strategic and Budgetary Assessments.
“There’s going to come a time, and it hasn’t come yet, when the tough choices will be made and there will be losers,” he said. “How well will that go down with the services and the people on the Hill and the combatant commanders?”
Panetta’s biggest asset may be his contacts on Capitol Hill. Although he has little military experience beyond a two-year stint in the Army in the 1960s, he was confirmed as defense secretary by a rare Senate vote of 100 to 0.
“He understands Congress,” said Rep. Norm Dicks (D-Wash.), who has known Panetta for four decades. “People like him. He respects the institution.”
As a longtime negotiator, he understands the importance of leaving some wiggle room.
In his House testimony and other public remarks, Panetta has opposed any cuts beyond the initial hit of as much as $465 billion, saying they would “damage our national defense.”
But in his interview with The Washington Post, he allowed that the Pentagon could possibly stomach more if the White House agreed to a broader, more palatable deficit deal with Congress. In that case, he added, the Pentagon might be able to compromise and find more savings.
“That’s the way business is done in this town,” he said. “I understand it, and everybody understands it.”