SECRETARY OF DEFENSE PANETTA GIVES PRESS CONFERENCE AT NATO HEADQUARTERS

FROM: U.S. DEPARTMENT OF DEFENSE
Presenter: Secretary of Defense Leon E. Panetta February 22, 2013
Press Conference with Secretary Panetta at NATO Headquarters, Brussels, Belgium

SECRETARY OF DEFENSE LEON E. PANETTA: Let me begin by welcoming everyone to what should be my final press conference on this -- the last of my international trips as secretary. I've been saying that a lot lately, but my hope is that this time it really works.

Truthfully, I have appreciated the opportunity to be here and to be able to consult with my fellow NATO and ISAF defense ministers one last time as secretary of defense. And I should say that I deeply appreciate all of their -- their kind comments to me and also to Giampaolo. Both -- both Italians are going to be moving on.

Foremost on the agenda has been the mission in Afghanistan, which was the focus, as many of you know, of this morning's session and a key topic of my bilateral meetings over the last two days. In my discussions with the other ministers of defense, there is a strong consensus that our mission is succeeding, it's succeeding on the ground because of the growing role and capabilities that all of us have seen of the Afghan National Security Forces.

The ANSF are now in the lead for nearly 90 percent of combat operations. And they are on track to step into the lead for all of these operations by this spring. That has truly exceeded the expectations that were set at the Chicago summit last year, but it is as a result of their success in the field that General Allen, in particular, felt that we could make that transition in the spring.

This success led President Obama to accept General Allen's recommendation that the U.S. maintain a strong presence, once we've made this transition of combat control to the Afghans, that it was important for the United States to maintain a strong presence throughout the fighting season of 2013. What we're looking at is probably a presence in excess of 60,000 during the fighting season through the final transition of tranche five, which would take place in August of 2013.

Following that, sometime in the fall, we would then begin a drawdown that would take us to roughly about 50,000 by November, and then it would take us down, as the president indicated, to 34,000 by February of 2014. We would maintain that number through the election in order to provide and assist the Afghans in providing sufficient security for the elections. Once those elections were completed, we would then begin the final drawdown of our forces towards the end of 2014. I have full confidence that we'll be able to achieve our goal of giving the ANSF full responsibility for security nationwide by the end of 2014 and successfully complete this mission.

As my Italian father used to say in an old expression that he repeated oftentimes, "piano piano te va lontano," which means, "Step by step, you'll go a long way." And I think that's probably good advice for all of us as we approach this final period, hopefully, in the completion of the mission that we've been engaged in, in Afghanistan.

As we draw closer to the end of our combat mission, the alliance has also begun to discuss how to implement our strong commitment to the long-term security of Afghanistan. In particular, we discussed how we could best continue to support the ANSF, building on the commitments that nations made last year in Chicago.

That continued support includes enablers and the possibility of providing funding to extent the ANSF at the surge level of 352,000 through 2018, before moving towards what would then be, hopefully, a more sustainable number. That is seriously being considered by the president, and it's something we discussed with President Karzai when he came to Washington.

We also discussed how to transition to our new train, advise, and assist mission after 2014. Today, we ask NATO to begin planning for a range of options on the post-2014 posture that would provide for an effective regional presence, not only in Kabul, but at fixed sites in the north, the south, the east, and the west.

As the United States weighs our own force posture options and consults with the Afghan government on a post-2014 presence, we will continue to work very closely with ISAF nations, particularly the other regional lead nations, to continue to discuss a range of options with regards to what the NATO force will look like in that post-2014 period. And our goal is obviously to ensure the success of this new mission and the long-term stability of Afghanistan. We've made a commitment to a strong enduring presence, and we intend to stand by that commitment.

As I prepare to leave NATO headquarters, I can say that, among the things that I am most proud of as secretary is the success of our troops that have been able to achieve the kind of successful direction that we've been able to achieve on the ground in Afghanistan and the extraordinary unity and strength and resolve of ISAF.

I had the opportunities a number of times to go to Afghanistan. This last time, I went to Afghanistan, had the opportunity to meet with all of our military leaders in the field. And to a person, each of them said that -- that this mission was headed in the right direction, and they all expressed confidence in the growing capability of the Afghan force to be able to handle security and to take on the enemy.

We've laid the groundwork for how our nations can come together to resolve the security challenges of the 21st century, including emerging challenges like the threat posed by violent extremism in North Africa and cyber attacks. I think the ability of having pulled together this great alliance and the effort in Afghanistan can really serve us as a model for how we decide to take on other challenges in the world that will confront us.

To resolve these challenges together, we must really commit to acting together. And there's no question that in the current budget environment, with deep cuts in European defense spending, the kind of political gridlock that we're seeing in the United States right now with regards to our own budget, is putting at risk our ability to effectively act together.

As I prepare to step down as secretary of defense, I do fear that the alliance will soon be -- if it is not already -- stretched too thin. In our sessions devoted to these topics, the questions I asked my fellow ministers were simple. Will we let our nations retreat from our responsibilities in the face of growing budget constraints? Or will we demonstrate the kind of creativity and innovation and political will to develop and share the capabilities we must have in order to meet future security threats together as an alliance?

The choice for our allies is clear. And I want to commend Secretary General Rasmussen for his leadership in warning against the effect of budget cuts and in proposing new ideas, like the Connected Forces Initiative, that will help our militaries continue to train and operate together, even as our deployments to Afghanistan are reduced.

These are critical to ensuring the readiness of the alliance, which has to be the top priority in an unpredictable and crisis-prone world. I'd also like to commend the secretary general for making cyber a major area of focus for the next defense ministerial. It's a call that I made upon NATO that they should do. We have seen -- we are seeing continuing attacks in the cyber arena on the private sector, on the public sector, in the defense arena. This is, without question, the battlefield for the future, and it's an area that NATO needs to pay attention to.

Let me conclude by noting, as I did last month in a speech that I gave in London, that there is a generational shift that is occurring. I'm probably the last American secretary of defense to have direct memories of World War II. And our youngest men and women in uniform today were born after the end of the Cold War.

The bonds that formed the basis of our alliance were built on the basis of those 20th century conflicts. But over more than a decade of war in Afghanistan, I believe we have renewed those bonds for the 21st century and carried out the most enduring and effective alliance campaign since World War II. If we have the strength to carry those bonds forward, then I believe that we can realize our shared dream of a better and more peaceful and more secure world for future generations. Thank you.

GEORGE LITTLE: The secretary is pleased to take a few questions. We'll start with the Associated Press. Or we'll start with Bloomberg.

Q: Thank you, Mr. Secretary. Gopal Ratnam with Bloomberg News. Good luck to you as you leave and head back to your beloved California. I want to ask you two questions. This morning, the German defense minister has told reporters that you had expressed to him the U.S. would keep between 8,000 and 12,000 troops in Afghanistan post-2014. One, would you confirm that? And, second, in your discussions with your counterparts here in NATO, what kind of commitments do you ask of them post-2014? And what kind of promises have you got or what kind of concerns have they expressed to you about their commitments?

SEC. PANETTA: First of all, that report is not correct. We did discuss a range of options. And what we discussed was a range of options that would -- that would be directed to the NATO force overall, which includes both the U.S. force contribution that we would make, plus what other NATO countries would contribute, as well.

And that -- those options are there. NATO will continue to do a planning process around those options. And we will be working with them as we develop the final decisions that the president makes with regards to our commitment to that enduring presence.

With regards to the 2014 period, we did describe that we felt it was important to develop this regional approach to be able to have a presence in some of the key areas in the northwest, east, and south, to be able to have a presence, obviously, in Kabul, that we would provide -- continue to provide enabling capabilities, particularly on a strategic level, with regards to those forces, and that we would continue to work with them to develop what the train, advise, and assist mission should look like. So we're going to be continuing to work on that.

And that was -- I have to say -- there was good receptivity among all of the ministers with regards to the broad elements that I described during this last session.

Q: (off mic)

SEC. PANETTA: Pardon me?

Q: (off mic)

SEC. PANETTA: All of -- all of the ministers, a number of the ministers spoke. And I have to say that all of the ministers who spoke indicated that they appreciated the outlines that we presented and that they, too, were committed to an enduring presence. So I feel very confident that we are going to get a number of nations to make that contribution for the enduring presence.

MR. LITTLE: Yes, sir?

Q: It's (inaudible) from German television ZDF. I just heard the same thing, that the minister of defense of Germany said 8,000 to 12,000, so I just would like to make that understandable for me. So you say altogether there might be 8,000 to 12,000, is the contribution of the U.S. troops even less than 8,000 to 12,000? Or -- and in which region would you like to place troops?

SEC. PANETTA: What -- what we discussed was a range of options. I don't want to go into particular numbers, because, frankly, we want -- we want to be able to have the flexibility to look at a range of options that we ought to have for our enduring presence. But I want to make very clear that the range of options we were discussing was with regards to the NATO force.

And the NATO force consists of both a U.S. presence, plus NATO contributions. And we didn't define specifics on that. Frankly, that remains to be determined as we go forward with the planning process.

MR. LITTLE: Now the Associated Press.

Q: All right, thank you. Thank you, Mr. Secretary. The discussion about extending and maintaining 352,000 Afghan troops for the next five years, can you talk a little bit about how you're going to be able to go to the U.S. Congress and defend something like that, when just the other day you had to issue public notice of furloughs for 800,000 civilian workers? How can you defend increasing this amount of spending when, obviously, the Defense Department in the United States is in deep financial problems?

SEC. PANETTA: Well, I think -- I mean, look, first and foremost, with regards to the crisis that we confront in the United States, the fact is, as I've said, that this, frankly, should not be a crisis. This is a -- this is a political crisis. It's not a crisis that relates to our capabilities within the budget that we've defined for the Defense Department.

And my hope is that -- that Congress does not allow sequester to take place. I think it would be, frankly, a very shameful and irresponsible act of political dysfunction if, in fact, that were to occur. The American people would be justly outraged to have people who they elect to office to protect them harm them by allowing sequester to take place.

So I guess my -- what I want to make clear is that sequester is -- is by no means -- doesn't reflect the budget that we have put in place to implement our strategy. It would be -- it would be truly an act of -- of irresponsibility if it happened.

And then I -- in terms of the consequences of sequester, I have to say, if sequester does take place, it could impact not only our readiness, but, frankly, the role that we would play with regards to the readiness of NATO, as well. So all of that would be impacted if that occurred.

Assuming that doesn't happen, then our view is that we -- you know, if the president makes the decision to continue the ANSF presence at 352,000, that that would be an investment that would be worth making, because it would allow us greater flexibility as we take down our troops, and it would allow us greater flexibility, frankly, to save in the funds that we now dedicate to the warfighting effort. And I think I can make that case to the Congress, that that would be an effective tradeoff.

MR. LITTLE: We have time for one more question. Yes, sir? And we'll wrap it up.

Q: (Inaudible), Tolo TV Afghanistan. Sir, most of the Afghans believe that the U.S. will abandon Afghanistan again when the combat mission finishes in Afghanistan. What type of guarantee you can give them, sir? Because on one hand, Taliban still pose a serious threat to the Afghan government, and the peace process is also not going well.

SEC. PANETTA: I -- you know, I want to make clear that -- that the United States and ISAF, the NATO -- the NATO countries that are involved in the ISAF effort, all of us are committed to supporting Afghanistan, not just now, but in the future. And that commitment is unwavering.

And the best example of that commitment is that we are going to maintain in excess of 60,000 troops there even after we've made the transition to the Afghans for combat responsibility. So we will maintain a significant presence there through a key fighting season and through the final transition of areas. And even as we draw down, we'll still maintain a significant presence there throughout the Afghan election.

And beyond that, we will maintain an enduring presence to be able to fulfill two key missions, to be able to train, assist and continue to support the Afghan army and defense force, and in addition to that, to conduct counterterrorism activities to make sure that Al Qaida and its affiliates never again are able to establish a safe haven there.

So I -- in the discussions I've had, both with President Karzai, with the defense minister, and with others, we have made very clear that we have a continuing and dedicated commitment to make sure that Afghanistan is a country that ultimately can govern and secure itself.

MR. LITTLE: Thank you, everyone. Have a good afternoon.

NATO MINISTERS DISCUSS TROOP STRENGTH IN AFGHANISTAN

Photo:  U.S. Drawdown In Afghanistan.  U.S. Army Photo.

FROM: U.S. DEPARTMENT OF DEFENSE
NATO Ponders Afghan Troop Strength, Official Says
By Karen Parrish
American Forces Press Service

BRUSSELS, Feb. 21, 2013 - NATO defense ministers gathered here are considering proposals to keep the number of Afghan national security forces at 325,000 for the next five years, according to a NATO official.

Defense Secretary Leon E. Panetta is here this week for the gathering of NATO defense ministers and representatives of non-NATO partner nations.

The official spoke to reporters on background, because the alliance and the Afghan government are still in discussions about the issue, and no final decision is expected soon.

Member nations fully realize that now, as the alliance enters a new phase of operations in Afghanistan and prepares to cut back on coalition troop strength, "we need to ensure that the Afghans are confident about the future," the official said.

Two narratives common among the Afghan people are working against success for coalition and Afghan forces, the official said: that coalition forces are there as occupiers, or that NATO will abandon Afghanistan after the transition to Afghan security lead is complete in 2014.

While the coalition has achieved "extraordinary progress" in defeating the Taliban and building Afghan forces, he said, it's now critical to address the Afghans' uncertainty.

Afghan soldiers and police are effective in their missions, but are increasingly distracted by fears about their personal futures, the official said. Coalition forces don't have to worry about whether they'll have a job, or get a paycheck, from year to year, he noted, but Afghan forces do.

If NATO can give Afghanistan's people solid assurances of the alliance's continued commitment beyond 2014, he said, "that's the one thing left, now, to advance the campaign forward."

SECRETARY OF DEFENSE PANETTA OUTLINES PROBLEMS OF BENGHAZI RESPONSE

Defense Secretary Leon E. Panetta testifies on the Defense Department's response to the Sept. 11, 2012, attack on U.S. diplomatic facilities in Benghazi, Libya, during a hearing before the Senate Armed Services Committee in Washington, D.C., Feb. 7, 2013. Testimony also included the findings of the department's internal review following the attack. DOD photo by U.S. Navy Petty Officer 1st Class Chad J. McNeeley

FROM:  U.S. DEPARTMENT OF DEFENSE
Panetta: Distance, Time Affected Benghazi Response
By Karen Parrish
American Forces Press Service

WASHINGTON, Feb. 7, 2013 - Better intelligence and closer interagency cooperation can help to prevent future crises like the Sept. 11, 2012, attack on U.S. diplomatic facilities in Benghazi, Libya, that killed four Americans, Defense Secretary Leon E. Panetta said here today.

Speaking before the Senate Armed Services Committee, Panetta said an exhaustive review of the Benghazi events has established the Defense Department responded appropriately to the attacks.

"This was, pure and simple, a problem of distance and time," he said.

"The interagency response was timely and appropriate, but there simply was not enough time given the speed of the attacks for armed U.S. military assets to have made a difference," Panetta told the senators, quoting the Accountability Review Board's findings.

The secretary and Army Gen. Martin E. Dempsey, chairman of the Joint Chiefs of Staff, testified before the committee in what may be Panetta's last appearance before Congress as defense secretary. Since the attacks, he noted, DOD has fully supported Congressional and State Department efforts to review the actions and decisions surrounding the events in Benghazi.

"The Department of Defense and the rest of the United States government spared no effort to do everything we could to try to save American lives," said Panetta, noting that two service members were part of the six-man team that evacuated Americans there within 12 hours of the initial attack.

"There will always be a tension between mission effectiveness for personnel -– that ability to get out and do what they're supposed to do in these countries -- and their physical security," he noted. "We are committed to steps that avoid a 'bunker mentality' and yet still afford greater protection from armed attack."

Panetta said DOD is taking a three-pronged approach to help prevent future attacks on U.S. diplomats and facilities by strengthening host-nation security capabilities, increasing security measures and enhancing intelligence and military response options.

"We have to be able to better assess and build up the capabilities of host governments to provide security," he said.

While the military doesn't have primary responsibility for security at U.S. diplomatic missions, he added, "where permissible and appropriate, and in collaboration with the Secretary of State and the U.S. chief of mission in the affected country, we believe that the Defense Department can assist in their development of host-nation forces using a range of security assistance authorities to train and equip these forces."

DOD also is supporting the State Department's efforts to harden facilities and reassess diplomatic security, the secretary said. Teams have evaluated 19 vulnerable diplomatic facilities, including the U.S. Embassy in Libya, he added, and officials are in the process of developing recommendations on potential security increases as required.

Over the next two to three years, he said, the Defense Department will assign nearly 1,000 additional Marines to diplomatic security detachments. There are 152 such detachments in place today, the secretary noted, and 35 more will stand up.

Officials also are focused on enhancing intelligence collection and ensuring that U.S. forces throughout the region are prepared to respond to crises, if necessary, Panetta said. He emphasized that the U.S. military is not a global emergency-response service, and troops need good intelligence information to operate effectively.

"We have forces on alert, and we're prepared to move, but our ability to identify threats, to adjust posture, to prevent plots and respond to attacks to our personnel at home and overseas depends on actionable intelligence, and it always will," he said.

Therefore, the secretary said, the Defense Department is working to enhance intelligence collection, improve the responsiveness of contingency assets and adjust the location of reaction forces.

"At the same time, we're working closely with State to ensure they have our best estimate of response times for each at-risk diplomatic facility, so that they can make the best informed decisions about adjustments to their staff presence in areas of increased security threat," he added.

Panetta closed his statement with a reminder to the committee that he sees budget uncertainty as the greatest security risk facing the nation.

With a "sequestration" mechanism in budget law set to trigger major across-the-board spending cuts March 1, he noted, DOD could lose about $500 billion in funding over the next decade, on top of the $487 billion spending cutback already planned.

"I know the members of this committee share the deep concerns that I have raised about sequestration, and I urge you to do the responsible thing and avoid weakening our national defense," he said.

Congress, DOD, the State Department and the intelligence community all have a responsibility for the nation's security, Panetta noted.

"If we work together, we can keep our Americans safe," he said.

SECRETARY OF DEFENSE PANETTA'S FINAL TRIP IN OFFICE

Defense Secretary Leon E. Panetta speaks with troops at U.S. Army Garrison Vicenza, Italy, Jan. 17, 2013. DOD photo by Erin A. Kirk-Cuomo

FROM: U.S. DEPARTMENT OF DEFENSE

On Final Official Trip, Panetta Shares Legacy of ServiceBy Karen Parrish
American Forces Press Service

WASHINGTON, Jan. 20, 2013 - Defense Secretary Leon E. Panetta returned here yesterday after concluding a six-day tour of European capitals that he has said was likely his last official trip in office.

Along the way, the secretary touched down in Portugal, Spain, Italy and Great Britain. In each country, he discussed Afghanistan; all of the nations Panetta visited over the week are coalition partners in NATO's International Security Assistance Force.

He also grappled with the Algerian hostage situation, and talked to troops, world leaders and reporters about budgets, strategies and the crucial nature of strong alliances in a world facing 21st century threats, including the invisible but nightmarish specter of computer-based attacks that could shut down the world's flow of money, energy and information.

Panetta also outlined a legacy, a vision and a dream: a legacy of service; a vision of resolute, committed global security cooperation; and a dream that he often says is not exclusively American, but simply human: a better life "for our children."

Panetta frequently speaks about public service, as he did to soldiers in Vicenza, Italy, Jan. 17, and to students who attended his speech at London's King's College Jan. 18.

The secretary started his own nearly half-century career in public service with a stint as an Army lieutenant, later representing his home state of California in Congress for 16 years. He was chief of staff and director of the Office of Management and Budget during Bill Clinton's presidency, and as part of President Barack Obama's administration has led both the CIA and the Defense Department.

Panetta has visited troops -- primarily U.S. forces, but also Japanese, Afghan, South Korean and British service members, among others -- on virtually all of his foreign and domestic travels as defense secretary, and his respect for the military people he leads is clear, as it was in Vicenza.

"The proudest thing that I do as secretary of defense is have the honor and the pride to serve and to lead the men and women in uniform who put their lives on the line every day for our country," he said to the soldiers of U.S. Army Europe's 173rd Airborne Brigade Combat Team. "A generation of young people since 9/11 who have come forward and been willing to serve this country and willing to fight and, yes, to die, has been a great tribute to the dedication of young people to what our democracy is all about."

Panetta told the students at King's College his love for democracy dates back to his formative memories of Monterey, Calif., during World War II. Born in 1938, he was too young, he explained, to understand all that was happening in the world.

"I can still remember the feelings of fear and uncertainty and vulnerability that pervaded those years," he said. "Blackout shades, the air raid drills, the paper drives, the soldiers and sailors who walked the streets of Monterey before they were sent off to battle. Those are all memories."

But his memories of that time also include some that seemingly still inspire him. The man who helped to bring down Osama bin Laden spoke warmly to the King's College crowd of his early impressions of Winston Churchill and Franklin Delano Roosevelt.

Panetta perhaps displayed the roots of his own "no refuge" approach to terrorists as he described those leaders' resolve: "By making clear that they would accept nothing less than the total defeat of fascism, Roosevelt and Churchill were determined to shape a new world, and to do everything they could to ensure it would never again descend into total conflict," he said.

"Their stirring oratory, their personal friendship, their clear-eyed resolve inspired a generation at war and, I know, continue to inspire all of us today," he added.

Panetta likely will be remembered for some stirring oratory of his own. The former congressman has not been shy as defense secretary in exhorting his 21st century counterparts to carry out the duties they were elected to perform.

As he told the soldiers in Vicenza while discussing budget issues, "This is not an unsolvable problem. We can do this. People have just got to suck it up and ... take on some of the risks and take on some of the challenges that are required by people in leadership."

The secretary has taken on daunting challenges while leading the Pentagon. A war-weary force has struggled with high suicide and sexual assault rates. Insider attacks have tested the strength of the ISAF coalition. Constant budget uncertainty has strained the nation's defense industries and frustrated and worried military commanders, service members and the defense civilian workforce.

Panetta spoke about that last item at the National Press Club here in December, shortly after returning from a trip to Afghanistan.

"It's easy to get cynical and frustrated in this town," he admitted. "And after 40 years, I know my level of cynicism and frustration. But my confidence and my hope for the future is restored every time I have the opportunity to visit with our troops on the front lines, as I did last week. In them, I see the spirit of public service that has kept this country strong for more than two centuries and which has helped us to overcome every period of crisis and adversity in our history."

At that same event, Panetta also displayed some of the same empathy he showed in Vicenza, when a young soldier who had been standing in formation waiting for him -- likely for quite some time -- started to sway on her feet in the middle of the secretary's remarks. He stopped and gazed at her in concern as two fellow soldiers led her from the formation. "Are you all right, dear?" the leader of the world's mightiest military asked her.

At the press club in December, Panetta exhibited the same respect for others in discussing a far more serious situation. He paid tribute to a reporter who had suffered an explosive blast in Afghanistan, leaving her with a prosthetic left leg and a shattered right foot that had been pieced back together.


"Journalists who commit themselves to doggedly pursuing the truth and telling the everyday stories of American people are public servants in their own right," he said. "On my last trip, I was honored to be accompanied by Cami McCormick, an award-winning radio reporter for CBS News who three years ago suffered a terrible injury ... while covering the war in Afghanistan. It was truly an emotional experience to be with her as she returned back to Afghanistan for the first time after that injury. She put her own life at risk in order to tell the story of that war."

McCormick also accompanied Panetta on his European trip. She delighted in a photograph she took of the Roman Catholic secretary in Rome, after he attended a general audience with Pope Benedict XVI. In the photo, the secretary's grin is incandescent. "It's perfect Panetta," she said.

The secretary's legacy of public service reaches even into his years outside the Capital Beltway. Panetta and his wife, Sylvia, in 1997 founded the Panetta Institute for Public Policy at California State University, Monterey Bay. The institute, as its website details, serves the entire California state university system, and under the direction of Sylvia Panetta -- before his return to the national stage, the couple shared the job -- provides study opportunities in government, politics and public policy. The institute also sponsors other activities, such as the Monterey County Reads program, which recruits hundreds of reading volunteers from communities around Monterey to work with children in kindergarten through third grade.

The institute's mission, the secretary told his London audience, is to "help prepare the next generation for a career in public service." He added, "I look forward to returning to the institute, to ... my wife and family, and, yes, to our walnut farm."

But last week, Panetta's focus was far from Monterey. In Lisbon, in Madrid, in a Rome wracked by thunderstorms and a London slushy with snow, the secretary spoke of his vision: a NATO alliance retooled for a young century's new threats, ready to foster security alliances and military cooperation around the world.

"The goal of this trip is really in line with that," he told reporters traveling with him while en route to Lisbon. "It's to try to strengthen and reaffirm the transatlantic alliance, our relationship with NATO, to reflect on what we've accomplished over the last decade of war, and to also lay the groundwork for the future."

In Portugal, the secretary said the war on terrorism continues. "We have made good progress," he added. "We have undermined their ability to conduct the kind of attacks that they would like to conduct. But the war on terrorism continues."

In Italy, he noted that "this is the kind of war that's going to require continuing pressure over a period of time."

In Spain, he said efforts to implement the way forward in Afghanistan decided upon at a NATO summit in Chicago were continuing as the alliance members' leaders had hoped. "Because of the work that has been done by all the nations involved to help build the Afghan security forces, ... I believe we are on track to meet the goals that our nations agreed to last year in Chicago."

And in London, the secretary asserted, "NATO has been an unprecedented force for global security and prosperity, developing into the most effective and capable and enduring multilateral security alliance the world has ever seen."

During his previous travels -- 18 international trips over as many months leading the Defense Department -- Panetta has talked of a world that is united against threats, where relationships that are not alliances, as with China, can remain respectful and engaged, and where a common goal of peace and prosperity becomes not exclusively the American dream, but also a globally achievable objective.

Panetta famously credits his Italian parents, who brought him up on that walnut farm after immigrating to America with "no money and few skills," with instilling that dream in him and his brother. The Panetta sons were the first in their family to attend college, and then law school, he noted.

The secretary says openly he hopes to return soon to wife, family, farm and institute. He told the troops in Vicenza that when their turn comes to go home, "I hope ... you'll have the same deep sense of pride that I have in the service that we've provided this country. We don't make a hell of a lot of money in these jobs, but if we can have a sense that we have maintained our integrity and that we have given something back to this country that has given us so much, that's the best pay we could ever have."

His own greatest accomplishment, he told a soldier who asked, is "being a part of something that really, I think, in the end, helped all Americans and the whole world to be safer."

U.S. SECRETARY OF DEFENSE PANETTA WARNS ABOUT UPCOMMING SEQUESTRATION EFFECTS

FROM: U.S. DEPARTMENT OF DEFENSE

Panetta Memo Describes Possible Sequestration Effects
By Jim Garamone
American Forces Press Service

WASHINGTON, Dec. 20, 2012 - While many remain hopeful that Congress and the administration will reach a deal that avoids sequestration, Defense Secretary Leon E. Panetta has issued a memo describing the potential implications of going over the fiscal cliff.

Planning for the effects of an across-the-board cut in defense spending as part of the Budget Reduction Act of 2011 "is only prudent," said DOD officials. Under the law, the reductions are due to take place Jan. 2, 2013.

Panetta said it is too early to assess what effects sequestration will have. He did say that it will not affect military personnel or military end strength as President Barack Obama announced his intent to exempt the military personnel accounts from sequestration last summer.

The secretary did clarify the potential implications of sequestration in his memo.

"If it occurs, sequestration will reduce our budgetary resources for the remainder of the fiscal year," the memo says. "These cuts, while significant and harmful to our collective mission as an agency, would not necessarily require immediate reductions in spending."

There is no threat of a government shutdown because of sequestration, Panetta said in the memo.

"Everyone will show up for work on January 3, 2013, and continue to drive on," said Army Lt. Col. Elizabeth Robbins, a Pentagon spokeswoman.

The memo states that there will be no immediate civilian personnel actions such as furloughs.

"Should we have to operate under reduced funding levels for an extended period of time, we may have to consider furloughs or other actions in the future," Panetta said in the memo. "But let me assure you that we will carefully examine other options to reduce costs within the agency before taking such actions."

If the department does need to take these actions, affected employees will receive all appropriate notifications, the secretary noted.

The Defense Department is already reducing its budget by $487 billion over 10 years. The Budget Control Act calls for a further $500 billion in cuts at DOD unless Congress and the administration pass a new law averting it.

"Sequestration was never intended to be implemented and there is no reason why both sides should not be able to come together and prevent this scenario," Panetta wrote.

U.S. SECRETARY OF DEFENSE PANETTA MAKES COMMENTS ON SYRIA AND SEQUESTRATION

Defense Secretary Leon E. Panetta poses for photos with the U.S. Naval Academy Midshipmen cheerleaders and band during a pep rally held in the halls of the Pentagon, Dec. 6, 2012. DOD photo by U.S. Navy Petty Officer 1st Class Chad J. McNeeley

FROM: U.S. DEPARTMENT OF DEFENSE

Panetta Discusses Syria Situation, Sequestration
By Terri Moon Cronk
American Forces Press Service
WASHINGTON, Dec. 6, 2012 - Defense Secretary Leon E. Panetta today repeated the U.S. government's growing concern that Syrian forces loyal to President Bashar Assad may be preparing to use chemical weapons on their own people.

Without getting into specific intelligence, Panetta told reporters at a news conference at the Department of Veterans Affairs there is no question that "as the opposition advances, in particular in Damascus, that the [Assad] regime might very well consider the use of chemical weapons." He added that what the U.S. knows "raises series concerns that this is being considered."

Panetta's comments came three days after President Barack Obama warned the Assad regime that there would be consequences for such a move, and that Assad himself would be held accountable.

Today, Panetta expanded on that warning.

"The president has made very clear that the Assad regime ought not to make the mistake of thinking that somehow it can use chemical weapons on its own people and get away with that. The whole world is watching," the defense secretary said.

Panetta said he would not comment on the consequences if Assad were to use weapons of mass destruction.

"But I think it's fair enough to say that the use of those weapons would cross a red line for us," he added.

The warnings to the Assad regime come as reports suggest opposition forces are closing in on Damascus and that the nearly two-year-old civil war is increasingly threatening Assad's inner circle.

On another matter, Panetta was asked today about the impact of sequestration on defense programs, should it occur.

"There is no question that if sequestration happens, it will impact those who are coming home [from the wars in Iraq and Afghanistan]," he said. "It's going to impact on what we're going to be able to provide them."

Panetta compared the automatic budget cuts triggered by sequestration to a "meat-axe approach."

If implemented, sequestration would "have a serious impact in terms of those [service members] coming home, the programs that serve them, the support system that we have not only for them, but for their families," he added.

"It's for that reason, obviously, that our continuing hope is that the leadership in this country comes together and finds an agreement that avoids this deficit cliff that we're hanging on," Panetta said.

PANETTA CRITICAL OF STALLED CYBERSECURITY LEGISLATION

U.S. Cyberbrigade.  Credit:  U.S. DOD.

FROM: U.S. DEPARTMENT OF DEFENSE
Panetta 'Disappointed' as Cyber Legislation Stalls
American Forces Press Service

WASHINGTON, Nov. 15, 2012 - Defense Secretary Leon E. Panetta is "disappointed" that an effort to move pending cybersecurity legislation forward failed in the Senate yesterday, Pentagon Press Secretary George Little said.

Little, traveling with Panetta in the Asia-Pacific region, issued a statement after the Senate rejected by a 51-47 vote a procedural motion by Sens. Joseph Lieberman and Susan Collins to move the legislation forward.

"Secretary Panetta was disappointed to learn that the Senate failed to move forward on the Cybersecurity Act of 2012, which would have enhanced our nation's ability to protect itself against cyber threats, which are growing at an alarming rate," Little said.

Cyberattacks threaten to have crippling effects on America's critical infrastructure and its government and private-sector systems, he added.

"The U.S. defense strategy calls for greater investments in cybersecurity measures, and we will continue to explore ways to defend the nation against cyber threats," Little said. "New legislation would have enhanced those efforts. If the Congress neglects to address this security problem urgently, the consequences could be devastating."

U.S. SECRETARY OF DEFENSE PANETTA SAYS REBALANCE IS PROGRESSING

Defense Secretary Leon E. Panetta conducts a press conference during his flight to Perth, Australia, Nov. 12, 2012. Panetta participated in Veterans Day ceremonies in Hawaii Nov. 11, before continuing on a six-day trip to Australia and the Asia-Pacific region. DOD photo by Erin A. Kirk-Cuomo

FROM: U.S. DEPARTMENT OF DEFENSE

Panetta: Rebalance to Asia-Pacific Shows Early Progress
By Cheryl Pellerin
American Forces Press Service
ABOARD A MILITARY AIRCRAFT, Nov. 12, 2012 - The Defense Department's strategic rebalance to the Asia-Pacific region is a long-term effort that is beginning to show tangible progress, Defense Secretary Leon E. Panetta said today.

The secretary is traveling to Perth, Australia, to attend the annual ministerial consultations between the United States and Australia, known as AUSMIN. It's his first official visit to Australia, an ally and partner to the United States for more than 60 years.

Panetta will join Secretary of State Hillary Rodham Clinton, Army Gen. Martin E. Dempsey, chairman of the Joint Chiefs of Staff, and Navy Adm. Samuel J. Locklear III, commander of U.S. Pacific Command, in meetings with Prime Minister Julia Gillard and sessions of the conference.

The secretary also will meet with Defense Minister Stephen Smith and Western Australia Premier Colin Barnett before continuing on to Thailand and Cambodia on his fourth official visit to the region, three of them this year.

In a briefing with reporters on his military aircraft, Panetta characterized the region as one in which the historical sacrifices of many nations, including the United States, have not been in vain.

"We've obviously sacrificed a great deal in the Pacific region, and the sacrifices that have been made have produced a safer and more secure and prosperous Asia-Pacific region," he said. "That sacrifice led to some 60 years of stability and allowed our many allies and partners in this region to be able to rise and prosper. Many of them have been able to take millions out of poverty."

Panetta said the region's success is equally important to the United States' national security and economic future.

"Looking ahead, we're going to continue to invest in the region in order to continue the progress that's been made," the secretary noted, describing some tangible early results of the long-term effort.

Panetta cited the deployment of Marines for rotations to Darwin, Australia, and an effort to send littoral combat ships to Singapore.

"We have announced that we're looking at a 60-40 split with regards to our Navy ships between the Pacific and Atlantic oceans, and that will ... take effect over the next few years as we go towards 2020," he said.

The Defense Department has completed the deployment of 12 MV-22 Osprey tilt-rotor transport aircraft to Japan, Panetta said, and it is working closely with U.S. Pacific Command on investing in the capabilities of several countries in the region.

"In Korea, we've strengthened our cooperation on space and cyberspace, [and] we will continue to strengthen that relationship in a very critical nation that is extremely important to our security for the future," the secretary said.

"We're working with the Philippines to develop a greater presence and access there [and] ... working to develop their capabilities," he added.

Panetta noted he traveled to Beijing in September to improve the U.S.-China military-to-military relationship and develop a strategic dialog in key areas, and that Deputy Defense Secretary Ashton B. Carter is working closely with officials in India to develop increased defense cooperation.

"But let me emphasize that the rebalance cannot just be about moving more ships or aircraft or troops to the region," the secretary said. "Ultimately, it has to be a whole-of-government approach. That means we have to continue high-level engagements [such as those] with the secretary of state, the chairman of the Joints Chiefs of Staff and myself at AUSMIN."

President Barack Obama also will visit the region next week, Panetta said.

"We need to continue diplomatic, economic and development assistance and engagement, and we need resourcing to ensure that this commitment is sustainable for the future," the secretary told reporters traveling with him. He added that the hope is to continue to make new partners in the region, working with countries to develop their capabilities and opportunities for a rotational U.S. military presence.

Later this week in Bangkok, Panetta will meet with his counterpart, Defense Minister Sukampol Suwannathat, and Prime Minister Yingluck Shinawatra. Afterward, he will travel to Siem Reap, Cambodia, where he will meet with Cambodian Defense Minister Gen. Tea Banh and with defense ministers from the Association of Southeast Asian Nations at the organization's annual security conference.

"We want to deepen and modernize our existing partnerships and alliances," Panetta said, "and build regional institutions, particularly working with ASEAN."

The secretary said ASEAN can bring countries together to deal with some of the challenges in the region. "There's a real opportunity here to make that work," he said.

The rebalance to the Asia-Pacific region will not take U.S. attention off critical events in the Middle East, Panetta said.

"The United States is the strongest military power in the world, ... and that means ... we have to cover the threats that exist in the world -- not just in the Asia-Pacific region -- and that's what we're doing," he said. "Even as we rebalance our efforts to the Pacific, we are maintaining a significant force in the Middle East to deal with contingencies there. We are still meeting our responsibilities with regards to other allies and partners in the world."

The new defense strategy accommodates the rebalance and U.S. responsibilities elsewhere, Panetta said. "That's why it's very important that ... we have some degree of certainty as to what the defense budget is going to look like," he added, "not just now, but in the next five years."

In the meantime, Panetta said, there are new areas of potential cooperation in the Pacific.

"It's going to take a lot of work and a lot of focus, but we are ... a Pacific nation, a Pacific power, [and] we're going to remain a Pacific power," the secretary said. "Our fundamental goal here is to work with other countries to advance the peace and prosperity of the region.

U.S. DEFENSE SECRETARY PANETTA IS STAYING FOR NOW

Defense Secretary Leon E. Panetta places a wreath at the National Memorial Cemetery of the Pacific in Honolulu, Nov. 11, 2012. Panetta stopped in Hawaii as he began a six-day trip to Australia and Asia. DOD photo by Erin A. Kirk-Cuomo

FROM: U.S. DEPARTMENT OF DEFENSE

Panetta Says He Will Stay in Washington to Meet Challenges
By Cheryl Pellerin
American Forces Press Service
ABOARD A MILITARY AIRCRAFT, Nov. 12, 2012 - Amid speculation that he will excuse himself from President Barack Obama's second-term national security team, Defense Secretary Leon E. Panetta said today his immediate goal is to finish the job he began in 2010.

"It's no secret that at some point I'd like to get back to California," Panetta told reporters traveling with him on his fourth official trip to the Asia-Pacific region. "It's my home." The secretary and he and his wife, Sylvia, founded the Panetta Institute for Public Policy there in 1997.

But in Washington, Panetta said, he is grappling with defense issues that range from looming spending cuts and budget issues to long-term planning in Afghanistan, "and the president and I are working very closely to make sure that we meet those defense challenges."

Right now, the secretary said, his most important focus is to meet his immediate responsibilities in the Defense Department.

In Afghanistan, coalition forces are gradually leaving the war zone in advance of the plan to withdraw foreign combat troops by the end of 2014.

There, Marine Corps Gen. John R. Allen, commander of the NATO-led International Security Assistance Force and of U.S. forces in Afghanistan, is developing options for the post-2014 U.S. presence in Afghanistan that the secretary said the White House and defense officials are now reviewing.

"My hope," Panetta said, "is that we will be able to complete this process within the next few weeks. I'm confident that we're going to be able to get to the right number for the post-2014 presence."

The secretary said Allen presented several options based on missions in Afghanistan that include counterterrorism, training and assisting the Afghan army and the ability to provide enabling capability.

"All of those are being carefully reviewed ... [to] determine the best course in order to have an effective enduring presence in the post-2014 period" in Afghanistan, Panetta added.

A harder job for the defense secretary will be to try to influence the outcome of the intractable problem of sequestration, a mechanism in the 2011 Budget Control Act that would trigger another $500 billion across-the-board defense spending cuts over the next decade, in addition to $487 billion in cuts already programmed, unless Congress identifies equivalent savings by January. Sequestration would require leaders to make very hard choices to ensure the department maintains technological superiority, maintains faith with its workforce and achieves the necessary cuts, the secretary said.

Since President Barack Obama's Nov. 6 re-election, Panetta said, some members of Congress have been speaking hopefully about finding a compromise on the issue.

"I really do think that, coming out of the election, this is a real opportunity for both Republicans and Democrats to address the fundamental challenge that faces this country with regards to our deficit," Panetta said.

From his own experience in dealing with budget deficits, the secretary said the only fair and effective way to reach an agreement on the bottom line is to consider all key areas of the federal budget.

"The fact is that we have addressed the discretionary area, taking almost $1 trillion out of discretionary areas, including almost half a trillion dollars from defense alone," Panetta said. "I think the responsibility now for both Republicans and Democrats has to be to look at ... what savings could be achieved on entitlements and what additional revenues need to be on the table as well."

The Defense Department already has made a significant contribution to deficit reduction, the secretary said, adding that the department has taken $487 billion over 10 years out of the defense budget "in a responsible way that's tied to a defense strategy that will take us into 2020 and beyond."

Before Congress looks for any more money from the Defense Department, Panetta added, "I want to see some progress with regards to both entitlements and revenues."

If Congress decides to delay the decision -- what Panetta calls "kicking the can down the road" -- he said the unsolved issue will represent a cloud over the Defense Department that is an unwelcome source of uncertainty.

Even when such issues are resolved, a reporter asked, does Panetta intend to stay on as defense secretary for four more years?

"Who the hell knows?" the secretary responded. "My experience in Washington is you'd better do this day to day."

U.S. DEFENSE SECRETARY AND SOUTH KOREAN DEFENSE MINISTER MEET REGARDING NORTH KOREAN MILITARY THREAT

U.S. Defense Secretary Leon E. Panetta, left, and South Korean Defense Minister Kim Kwan-jin, right, pose for an official photo at the Pentagon, Oct. 24, 2012. DOD photo by Erin A. Kirk-Cuomo

FROM: U.S. DEPARTMENT OF DEFENSE
Defense Leaders: North Korea Remains Threat to Peace

By Jim Garamone
American Forces Press Service
WASHINGTON, Oct. 24, 2012 - North Korea remains a threat to regional and global peace, U.S. and South Korean defense leaders said here today, adding that they still are unsure what North Korea's new leader, Kim Jong Un, will do.

Defense Secretary Leon E. Panetta and South Korean National Defense Minister Kim Kwan-jin spoke to reporters following the 44th annual Security Consultative Meeting at the Pentagon today.

U.S. and South Korean defense leaders discussed the threat from North Korea and reaffirmed that both nations are concerned about North Korea's nuclear and missile capabilities.

"Secretary Panetta and I reaffirmed our shared view that North Korea's asymmetric military capabilities, such as [its] nuclear weapons program and missiles, pose a serious threat not only to the security of the Korean peninsula, but also to that of Northeast Asia and the world as a whole," Kim said.

The United States and South Korea will continue to work together to deter North Korea, the defense leaders said. Specifically, they will continue to work on "the concepts and principles for a bilateral deterrence strategy of the North Korean nuclear and [weapons of mass destruction] threats," Kim said. The two countries will work together to develop a tailored deterrence strategy based on these concepts and principles.

Panetta and Kim also agreed on South Korean missile guidelines.

The defense leaders also addressed the planning that will lead to the transfer of wartime operational control for forces on the peninsula to South Korea. This milestone is set for December 2015. "In particular, the two countries agreed to jointly develop a future command structure that will ensure military efficiency after the transition of wartime operational control," Kim said.

Panetta said South Korea will continue to be an exporter of peace -- continuing to work with the international community in places such as Haiti, Afghanistan, the Gulf of Aden, Lebanon and South Sudan -- but that its focus at home must remain North Korea.

"With regards to any provocations from the North," he said, "I think it's very clear that South Korea and the United States have a strong cooperative relationship, and that when those provocations occur, that we will work together to determine ... [what] kind of response should be provided, if necessary."

Kim said that for now, Kim Jong Un's regime "seems to be quite stable." But he noted signs that the regime will conduct another nuclear test.

"In fact, North Korea has been preparing for this for quite a long time," he said. "And when the time comes for a political decision, it may in fact resort to this third nuclear test."

Since taking over, Kim Jong Un has been trying to introduce economic reform measures, the defense minister said. "He seems to be making attempts to bringing a better life to his people, but the likelihood of success is yet to be seen," he added.

Kim said the 29-year-old North Korean leader will continue hang on to the "military first" policy that has been the mainstay of North Korea since the end of World War II. "He may be a lot more aggressive compared to old people, because he's still young," the South Korean defense minister said.

Panetta agreed that much remains to be known about Kim Jung Un's regime. "We still don't know whether or not he will simply follow in the steps of his father or whether he represents a different kind of leadership for the future," he said.

The U.S. concern is that North Korea continues to prepare for missile and nuclear testing, the secretary said.

"They continue to engage in enrichment of uranium, against all international rules," he said. "They continue to behave in a provocative way that threatens the security of our country and, obviously, of South Korea and the region."

SECRETARY OF DEFENSE PANETTA COMMENTS ON CHINA MEETINGS

Defense Secretary Leon E. Panetta talks with Chinese Vice President Xi Jinping before a meeting in Beijing, Sept. 19, 2012. DOD photo by Erin A. Kirk-Cuomo   

FROM:  U.S. DEPARTMENT OF DEFENSE

Panetta Calls Beijing Meetings 'Substantive, Productive'

By Karen Parrish
American Forces Press Service

BEIJING, Sept. 20, 2012 - Visiting China at what he called a "very important moment" for the U.S.-China relationship, Defense Secretary Leon E. Panetta said yesterday his meetings with key Chinese leaders here have been both substantive and productive.

In a discussion with Chinese reporters and media representatives traveling with him, Panetta reviewed his meetings over two days with Chinese leaders including Vice President Xi Jinping, State Councilor Dai Bingguo, Vice Chairman of the Central Military Commission Xu Caihou and Defense Minister Gen. Liang Guanglie.

Key discussion points throughout the meetings, the secretary said, included territorial disputes, ballistic missile defense and North Korea, and cyber attack and intrusions. The overarching topic, he added, was the U.S.–China relationship in the context of the U.S. strategic rebalance to the Asia-Pacific region.

Panetta drew a parallel in describing his advice to Chinese leaders over a territorial dispute simmering between China and Japan – which, he noted, he also tendered to Japanese senior government officials when he visited there earlier this week – and Chinese advice to him over North Korea. Each side urged the other to seek peaceful, diplomatic solutions to their differences, he noted.

The secretary said he has some understanding of the deep feelings and long-standing differences between China and Japan over disputed islands in the East China Sea. But, he added, "it's really important that we not be trapped by the past and that we move forward."

Panetta said his message on the topic is consistent to any country claiming disputed territory in the East China Sea or South China Sea: while the United States doesn't take sides in territorial disputes, "we strongly urge the parties to exercise restraint and to work together to find a peaceful resolution to these issues."

The secretary added that he also strongly urges the Asia-Pacific nations to form a multilateral forum to resolve regional conflicts according to agreed-upon principles.

Panetta said his meetings here gave him the impression that the Chinese are looking for a good format in which to try to resolve these issues for the future. "They, too, have a concern that these issues can't just be resolved on the fly -- that there's got to be a process to try to deal with them," he added.

Both Japanese and Chinese leaders signaled this week that they "recognize that it's important not to let this kind of dispute get out of hand," Panetta said.

China's leaders similarly urged that the United States exercise restraint in its approach to North Korea, Panetta acknowledged. China, along with Russia, is one of North Korea's principal allies.

U.S.-North Korea differences came to the fore this week when, during his stay in Japan, the secretary announced the United States and Japan are discussing expansion of Japan-based ballistic missile defense radar systems. Panetta emphasized the X-band radar, which detects ballistic missiles early in their flight and provides precise tracking information for targeting systems, is intended solely for defense against North Korea.

The secretary told reporters that North Korea threatens the United States, its forward-deployed forces and its allied and partner nations as it continues to test nuclear weapons and delivery systems and to enrich uranium in defiance of international law.

During his meetings with China's leaders, Panetta said, he urged Chinese officials to try to persuade North Korea to engage with the United States to work on resolving these issues through diplomacy. In turn, he added, the Chinese leaders strongly recommended that the United States try to resolve its issues with North Korea peacefully.

Both sides noted that the recent change in North Korean leadership has produced some signs of softening in Pyongyang's stance, he noted. "We agreed that there are changes that are taking place and that we have to keep track of those changes," the secretary said.

Panetta said he also raised concerns about threats in the cyber domain, which he called the "potential battlefield for the future."

Cyber technology "has the potential to cripple a country, paralyze a country ... [and is] being used in order to exploit information -- important economic information -- from one country to the next," he said.

Panetta said the United States "has concerns about what China has been doing, in terms of exploiting information," and that during his meetings here he stressed the importance of the United States and China having a dialogue regarding cyber.

"I think we do have to make the effort to try to sit down with China and with other countries to discuss how we can approach cyber," the secretary said. He added that cyber is a growing threat in China as well, and that "there was concurrence" during meetings that the topic is worthy of strategic discussion.

"There was a sense that there has to be an effort to look at the larger picture here and whether or not we can develop international rules and standards. ... I thought that was a very good step to ... at least beginning the discussion about dealing with this issue," Panetta said.

The secretary has maintained throughout his comments to reporters this week that the chief focus of his visit to China was to strengthen military relations between the two countries and to seek Chinese response to the U.S. strategic rebalance to the Asia-Pacific region.

"What I hope this visit has made clear is that engagement with China is a critical part of [the rebalance]," he said. "And I believe we're making real progress towards building a military-to-military relationship with China that is, in fact, healthy, stable, reliable, and continuous."

China and the United States will not always agree, Panetta acknowledged. But he said the key to the relationship, as to any relationship, is open communications and the ability to express views candidly. "That, almost more than anything else, is what can lead to improved relations between the United States and China," he said. The "candid and frank discussions" he has had here bode well for the future, he added.

Concerning the U.S. rebalance in the Asia-Pacific region, Panetta said, Chinese leaders acknowledged that they don't view it as a threat. "They viewed it as important to the future prosperity and security of the Pacific region," he told reporters.

Their key concerns, he added, are that the United States develops and strengthens its presence in conjunction with developing a strong U.S.-China relationship, and that both nations work together to develop the capabilities of other countries and develop security for the region.