By Emelie Rutherford
President Barack Obama’s pending nomination of CIA Director Leon Panetta to be defense secretary as soon as July 1 is not causing many ripples in the defense industry or on Capitol Hill, observers said.
Obama will announce today he intends to nominate Panetta to replace retiring Defense Secretary Robert Gates and Army Gen. David Petraeus, the commander of U.S. and allied forces in Afghanistan, to take the helm at the CIA, a senior administration official told reporters yesterday.
Panetta would follow Obama’s established Afghanistan strategy, for withdrawing U.S. troops starting in July, as well as Obama and Gates’ efforts to cut the defense budget, the official said. Obama announced two weeks ago he will conduct a thorough review of the military’s roles and missions with Pentagon leaders in an attempt to save $400 billion in defense spending by 2023.
“The president would look to Director Panetta to continue the work that Secretary Gates has done on efficiencies and savings at the Pentagon,” said the administration official, who spoke on the condition on anonymity. “That is going to…intensify, as you know, with the president’s announcements of additional cuts of some $400 (billion) over the next 12 years.”
The official called Panetta an experienced manager “of very large budgets, someone who is familiar with large organizations, (who) has the ability to lead those organizations and implement strategy.”
Panetta has directed the CIA since Feb. 13, 2009. He previously served as President Bill Clinton’s chief of staff and director of the Office of Management and Budget. He was a Democratic congressman from California from 1977 to 1993, and chaired the House Budget Committee during his final four years in the House.
The Panetta nomination will be subject to approval by the Senate Armed Services Committee (SASC) and full Senate. If the confirmation process proceeds without delay, Gates would leave the Pentagon June 30, with Panetta ready to take over the following day. Obama would submit the nomination of Petraeus, who would retire from the military, in the summer, so he could start at the CIA by the beginning of September. Obama plans to nominate Marine Corps Lt. Gen. John Allen, the deputy director of U.S. Central Command, to take Petraeus’ spot, the administration official said.
Lawmakers were receptive yesterday to the Panetta and Petraeus nominations.
“Director Panetta at the Defense Department…he’s certainly done a terrific job in the intelligence community, and I think could do an equally good job” at the Pentagon, House Majority Leader Eric Cantor (R-Va.) said yesterday morning on CNBC’s Squawk Box program. The congressman called the pending Petraeus move to the CIA “a real confidence builder.”
Additional lawmakers–including senior Senate Democrat Charles Schumer (N.Y.), Senate Intelligence Committee Chairwoman Dianne Feinstein (D-Calif.), and House Homeland Security Committee Chairman Peter King (R-N.Y.)–said yesterday they would strongly support moving Panetta to the top Pentagon post.
SASC Ranking Member John McCain (R-Ariz.), who will be a key decider in the conformation process, did not comment as of press time yesterday
Meanwhile, Gates’ replacement by Panetta is not seen as a “major risk for defense stocks,” Byron Callan director of Capital Alpha Partners LLC in Washington, said in a note yesterday.
“Panetta has extensive government and national security experience,” said Callan, a defense analyst. “Gates will be engaged in the roles and missions review that is starting and which will inform budget changes under the Administration’s $400 billion cut to national security spending budgets over the next 12 years.” Thus, Callan said he expects a smooth transition from Gates to Panetta.
Speculation has run rampant in Washington about who will replace Gates, who also served under former President George W. Bush and made clear he wants to start his delayed retirement this summer.
Other rumored contenders for defense secretary have included Sen. Jack Reed (D-R.I.), Navy Secretary Ray Mabus, and Under Secretary of Defense for Policy Michele Flournoy.
Obama also plans to nominate Ryan Crocker, the former U.S. ambassador to Iraq, to be ambassador to Afghanistan, replacing Karl Eikenberry, the administration official said yesterday.
More changes come at the Pentagon later this year. Chairman of the Joint Chiefs of Staff Adm. Michael Mullen and Chief of Naval Operations Adm. Gary Roughead both are set to retire this fall.