and a talk on global cyber security. later, a look at the strategic relationship between the u.s. and pakistan. >> leon panetta testifies. he was asked about military operations in iraq, afghanistan, and libya and talked about the budget. he has served as rector since 2009.

senator carl levin will join the hearing in a minute. we will also hear interjections from dianne feinstein and barbara boxer. leon panetta served in the united states congress from 1977 to 1994. this hearing is 3.5 hours. >> the morning. this morning the committee meets to consider the nomination of leon panetta as secretary of defense. he is no stranger to testify before congress. over the course of his career,

we welcome you to the committee today. the thank you for your dedicated service to our nation. nd your willingness to enter the call once again. we know your wife is not able to be here with you today. she has made her own sacrifices over the last 50 years, supported your efforts in the public and private sectors. i know that i speak for the committee when i say that we love to think her in person for the sacrifices that she has made. please let your wife know of the committees gratitude for her support and your sacrifice. if confirmed, director panetta will replace secretary robert gates at the helm of the department of defense. he was asked to stay on. it provided a welcome continuity

in our defense leadership. director panetta's nomination represent change and brings an impressive level of continuity as well. the next secretary of defense will face a complex set of demands on our armed forces. for most of the ongoing war in afghanistan and iraq. we continue to have approximately 150,000 troops deployed. in addition, even after the extraordinary raid that killed osama bin laden, terrorist threats against our homeland did seem to emanate from pakistan, yemen, somalia, and elsewhere. the risk of a terrorist organization getting their hands on and detonating an improvised nuclear device or other weapon of mass destruction remains one of the gravest threats to the

united states. the defense department is working with the departments of state, energy, of insecurity, and other u.s. government agencies to prevent the proliferation of nuclear weapons and dangerous technologies. a number of key national security decision will have to be made in the coming weeks and months, even as the drama of some kind ofaq -- continuing u.s. military presence beyond the december 31 which role does not agree to by president bush and prime minister maliki in the security agreement between our countries. another key decision point is looming in afghanistan. regarding reductions in u.s. forces starting in july. president obama said the other day that, "it is now time to

recognize that we have accomplished a big chunk of our mission and that it is time for afghans to take more responsibility." the president has also said that the reductions starting in july to will besignificant -- will be "significant and i just a token gesture -- and not just a token gesture." to assume security responsible for all of afghanistan. i support the so-called transition strategy, which calls for afghan security forces to take more and more of the lead in providing for their countries security. the more that afghan security forces do that, the better the chances of success, because the

taliban's biggest nightmare is a large effective afghan army, an enormous party perspective of the afghan people and control of afghanistan security. having security forces in the lead would deprive the taliban of the biggest propaganda target, the claim that foreign troops are occupiers of afghanistan. there is nothing inconsistent between transitioning security responsibility to afghan security forces and long term strategic relationship with afghanistan, which is also important to sustain a successful outcome. another major issue facing the department is the stress on our armed forces after 10 years of nonstop war. the repeated applause of four military has resulted in many of

our service men and women being away from their families and homes for two, three, or four torours. military families are also stress. our men and women in uniform can t to answer the call. the next secretary of defense will be required to juggle the competing demands on our forces while washington struggles with an extremely challenging physical environment. the defense budget will not and should not be exempt from cuts. this will require congress working with the next secretary of defense to scrub every program and expenditure in the defense budget and to make tough choices and trade-offs between the requirements of art were fighters today in preparation for the threats of tomorrow. the administration in february submitted a defense budget for

fiscal year 2012 which included some efficiency savings. in april, president obama announced he wanted to reduce security spending by foreign billion dollars over 12 years -- by $400 billion over the next 12 years. including the departments of state and homeland security. we have asked the a ministration what parts of the $400 billion reduction to the recommend the pentagon cuts and how many of those for fy 2012? so far we've done no answer. hopefully say we'll get mr. panetta's understanding on that matter. his service is invaluable

because he understands the into workings of the budget process and because he shaped the decision that helped achieve the budget surpluses of the late 1990's. fort lee, director panetta brings a compelling record of achievement and experience as well suited to the demands of the position for which he has been nominated. leon panetta has repeatedly demonstrated an ability to work across party lines. since entering public service, he worked on the staff for the republican whip in the u.s. senate, headed the office of civil rights in the nixon administration. he served eight terms and became chairman of the house budget committee. leon panetta has been indicted by a clear compass. he has said, "in politics, there has to be a line beyond which

you do not go. too often people don't know where the line is. my family, how was arrays, my education all reinforce my being able to see that line." leon panetta has been involved in the most pressing national security issues of our time during his tenure as president obama's director of the cia. this includes overseeing the manhunt for osama bin laden and the impressive operation that brought an end to al qaeda's murderous leader. this operation epitomizes the way in which the cia and the defense department are finally working together to support each other in the counterterrorism operations. the assault on bin laden's hideout is the first significant instance, i

believe, of an operation that could have been conducted under defense department authorities, but that was instead executed under the authorities of title 50, with the director of the cia exercising operational control over our elite military force. then the conclude by expressing on behalf of this committee our gratitude and are a deep admiration for the man whose shoes director panetta's has been nominated to fill, secretary robert gates. service to thes' country has been extraordinary. he worked under the administration of eight presidents. he filed a long career in government and served his country again in the critical post of president bush's secretary of defense a difficult time in our history. to route his tenure, --

throughout his tenure, his leadership and kantor have earned him the trust and respect of all who have worked with them. secretary gates has combine business with the toughest and cleric and courageous, a firm decision making. secretary gates is devils a direct and open relationship with congress -- secretary gates developed a direct and open relationship with congress. his time has been exceptional. senator mccain. >> let me welcome director panetta. i am grateful for its remarkable career of public service and is a lotus to serve in this new and important capacity. i am appreciative of your family and the support they have given to you.

i also welcome my colleague from california who was wrote underscore your important qualifications to assume the position of secretary of defense. your successor as director of the cia over the past two years, and have been many, or credit to you at the men and women of the intelligence committee. you and i know the director would be the first to limit that he has big shoes to fill if confirmed in a person of robert gates. i have seen many secretaries of defense and i believe history will long remember secretary gates as one of america's finest, most effective and most impact all secretaries of defense. one of the key criteria that we should be looking for in the next secretary of defense is continuity. the county was of the wise decision making that characterized secretary gates' leadership at the department of

defense. things to is -- thanks to the good work of this team, the next secretary of defense will take all this with a good deal of positive momentum. many challenges remain. our countries faces decisions that will echo for decades to come, this is a double determine whether it would remain the world's leading global military power able to meet our many commitments worldwide, or what we will begin abandoning that role. will have perhaps the most impact on this outcome is the stated goal of cutting $400 billion in defense spending on top of the $178 billion in reductions that secretary gates already announced.

this cuts into the muscle of our military capabilities. defense spending is not what is sinking this country into a fiscal crisis. if the congress and president akbar that flawed assumption, they will create a situation that is truly an affordable, the decline of the u.s. military power. i know there will be cuts to defense spending and some reductions are no doubt necessary to improve the efficiency of the department of defense. but also remember -- more rubber when the former chief of staff of the army warned in 1980 after cuts were made and testify before this committee that we have had a hollow army. that is not an experience that we should repeat in the years to come. we must learn the lessons of history.

how the proposal could be implemented. another major decision involving how we achieve our objectives in the three conflicts in which u.s. forces are now engaged -- iraq, afghanistan, libya. in iraq, the key question is whether forces will remain in iraq beyond the end of this year to support their continued need in our in our national interests. i believe such a presence is necessary, as secretary gates has argued. in afghanistan, the main question is the size and scope of the drawdown. i would agree with secretary gates that any drawdown should be modest celesta maximize our ability to lock in the gains of our troops during the next fighting season. in libya, there are signs that muammar gaddafi may be starting

to crack. the odds of a stop remained far too high. i believe u.s. treasury to be to reduce those odds as much as possible and quickly force muammar gaddafi to leave power. another significant challenge department defense pa -- secretary gates has made some courageous decisions to get major weapons to kermit project's contractor is similar focus is brought to of the defense department chooses to buy billions of dollars in services to maintain the highest degree of readiness. as best in this budget a farmer, it will be important to continue to limit weapons programs that are over cost, behind schedule, and not providing improvements in combat power and capability. we must continue to eliminate

every dollar and wasteful spending that siphons reserves away from our most vital need, enabling our trooped to succeed in combat. director panetta, you are nominated to lead our armed forces. this has placed a major strain on our armed forces and our families. our military is performing better today than at anytime in our history. this is things to the thousands of brave young americans in uniform who are writing a new chapter in history of our great country. they have shown themselves to be the equals of the greatest generations before them. a: all + + enter is to be equal and for ever faithful to the sacrifices of these amazing americans. we have a quick 10 second comment. >> thank you.

i have an unavoidable conflict. i have served with mr. panetta and i consider him to be a close friend. but for to support his confirmation and serve it with him in is the capacitor think you for the opportunity. >> thank you, senator mccain. our two colleagues from california are here to introduce mr. panetta. it is a treat the you're with us. senator feinstein, the chair of the intelligence committee. she has a lot of direct experience long before then with director panetta. >> thank you, mr. chairman and members of the committee. it is distinct pleasure for me to introduce the director of the central intelligence agency and distinguish california, leon

panetta, who was nominated by president obama on april 28 to be the 23rd secretary of defense. as members of this committee will know, it is 47 years of public service, director panetta has held positions of congressman, chairman of the house budget committee, director of the office of management and budget, chief of staff to the white house, co-director with his wife of the leon and sylvia panetta institute for public policy, which i've had the pleasure of speaking before, a member of the iraq study group, a secondof the caia, and first lt. as an intelligence officer. trusted adviser to the president and respected member of his national security team. in the course of two years, he

has mastered the intelligence field, led the cia three very tumultuous time, restored badly damaged relationships with congress, and with the director of national intelligence, and carry out president obama's personal instruction to him to find osama bin laden. i have no doubt that his past experience and is capabilities prepared leon panetta to meet the major challenges before the department of defense. with knowledge of cia operations and analysis, he will come to the pentagon with a thorough understanding of the situation in afghanistan as well as the aggravating factors of our relationship with pakistan. through cia analysis, he has also well aware of the other contingencies around the globe, where the united states

military may be called to deploy. director panetta is also well positioned to guide the department to the constrained budget environment which the chairman spoke of along with the rest of government. he possesses the credentials and experience to make cuts are needed and were prudent. i am confident that he will do so in a way that keeps the military strong and capable, and in a way that maintains the cohesion of the department's and its services. finally, let me recognize the there many officials in government with the intellect and management skills to do this job. leon brings something more. he has an interesting leadership style, with a deft personal touch that matters to the people in his charge and that really benefits the oversight responsibilities that we in congress have. then give you an example.

it was early in his tenure at the cia in 2009 when director panetta requested an urgent meeting with the intelligence committee to brief us on a program he had just learned of and that he had learned had never before been briefed to congress. he found that unacceptable and we very much appreciated his position. in the two years since, he has never declined to answer a question or provided with this -- or provide us with this candid views. i believe center chambliss can testify to this -- i believe senator chambliss can testify to this. let me conclude -- a national public group into the last week with secretary gates noted that

the health care budget of the department of defense was bigger than the entire budget of the cia and that no other position could fully prepare someone to be secretary of defense. i have great respect for secretary gates and praise him for a service to this country beyond all reasonable expectations. he has been in debt stemming secretary of defense. but i would suggest to you that leon panetta, who has served honorably and successfully in congress, at omb, at the white house, and of the ca, is prepared and uniquely qualified to be another outstanding secretary of defense in this very challenging time. i think the committee. -- i thank the committee. >> senator boxer. >> i appreciate every word my

colleagues about my friend, leon panetta. i will try to add more of a personal side because i've known this man and work with them since 1982. he became one of my mentors. eventually, i served on the budget committee or he was the chairman, and i watched him very carefully reach out across every kind of line that would divide us. republican, democratic liberal, conservative, moderate. we were facing a lot of new, complex issues. one was the eighth crisis -- one was the aids crisis. i remember saying there was a new disease and we have not done anything about it. he said, what do you hold some hearings and bring in the republicans, and we did. we were able to get the first

funding for aids research. was ready to listen. he gets it. we have seen that in every single job that he has fulfilled. this is a man who has dedicated himself to public service, and we're so grateful to him. i won't go through every job he has held. it would take too much time. senator feinstein highlighted anye many of those -- so mn of those. to be someone who could be such a trusted advisor that two presidents have chosen him. i could go on the about leon. let me say what is meant to the

people of california. he has recognized the importance of our resources in our sta te, namely our coast and our ocean. he said it this is an economic issue for us. he preserved the coast. he is a visionary. we saw the move into the cia and the work he did and the latest issue and he can talk about does not do that much in terms of making sure that osama bin laden was finally taken out. this was a brave mission by our military. leon panetta was a part of the decision making. i think at this time were york in gazed around the world and so many difficult conflicts, so many difficult conflicts, he is bringing out the intelligence

perspective to the job. i would ask unanimous consent that my formal -- i want to turn to leon as a senator from california and say thanks so much for everything you have done throughout your career for this country. i know your origins. i know how proud your family is. i think we'll sure that pride in nyou. good luck and help the committee does as quickly -- good luck and i hope the committee does this quickly. to stay.e both welcomed tuesda >> we have a bill on the floor. i will be going to the floor. >> you never miss a point to point.ur

linda colorado mr. panetta -- let me call on mr. panetta. thank you again for your service to correct thinking, chairman -- think you for your service. >> thank you. i am deeply honored and humbled e as the e at new-paragraph hers president's nominee. i thank my fellow californians who are dear friends and it dear colleagues for the role of secretary of defense, without question, it involves a very

large responsibility in size alone. still, in a very basic way, it is the similar to the role of the cia director in that our first and foremost mission is to protect the country. if confirmed, my number one job will be to insure that america continues to have the best trained, the best equipped, and the strongest military and the world. in order to make sure that we protect our country. as many of you know, i had devoted my career to public service. it began a long time ago when i served as an intelligence officer in the united states army. i was proud to wear the uniform of our country. my respect and admiration for

our nation's armed forces has only grown the decade cents. my youngest son, jim, served in afghanistan and received the bronze star. i have personally -- i personally witnessed the tradition of service and sacrifice that drives each generation to fulfil a fundamental duty to our country. in addition to respecting that great tradition of duty, i have done a number of things to try and prepare for this very difficult and challenging job. first, in the weeks since my nomination, i spent a number of hours with bob gates. he is a dear friend. when he and i first got to know each other as we were building our careers in public service, we also served together, as you

know, on the iraq study group. we continued to serve together as members of the president's national security team. we share a common belief that the national security of this country is the responsibility of all americans regardless of party. i, too, believe he will be remembered as one of the greatest secretaries of the defense and our nation's history for the way he led the department during a time of war and for the crucial reforms he has tried to put in place in the way the pentagon does business. those are reforms that i intend to carry on. second, i talked with our service secretaries and a service chiefs. i believe it is important to have a candid, open line of

communication between the secretary and all the service chiefs. they are the ones who are out there leading each of one of their services. i need to know what they're thinking. i need to know what is important in terms of serving the interests of the troops that they directly lead. one of those chiefs told me -- for our troops, there has been no shortage of war. indeed, we are a nation at war. our volunteer force has been stretched by combat that has lasted nearly a decade. we owe it to them. oh to their families to insure that they have the best leadership, the best training, the best equipment, the best benefits, the best health care that we can give them. i pledge to them and i pledge to

you that every deployment decision that i make will be mindful of the stresses on our men and women in uniform and on their families. third, i have reached out to former secretaries of defense both democrat and republican. i ask for their advice. to a person, they impressed upon me how important it was to stay focused on the management of the pentagon. this is the biggest enterprise in our government. it requires focus and hands-on management. which is the only way i know how to do business. fourth, i sat down with many of you and have known many of you throughout my career. because i really do believe that congress has to be a partner in this role in the protection of our country, i am a creature of

the congress. i believe that the pentagon is made stronger by your oversight and buy your guidance. as a young legislative assistant a long time ago here in the senate, i had the honor of seeing firsthand the bipartisanship of leaders like dick russell and henry jackson and barry goldwater. as a member of the congress, i saw that tradition carried on by other great leaders. i believe deeply in the tradition of strong, bipartisan national security leadership. you, mr. chairman, and you senator mccain, have carried on that tradition and i thank you for that. this is a time of historic change. unlike the cold war, when we had one main adversary, we face a multitude of challenges.

al qaeda and other global terrorist networks, in places like yemen, somalia, north africa, not just fataa in pakistan. dangerous enemy spread out across the world. we face insurgents and militants who cross borders to conduct attacks. we placed the proliferation of dangerous weapons in the hands of terrorists and in the hands of rogue nations. we face cyber attackers, a whole new arena of warfare that can take last not only now but in the future. that is something we have to pay attention to. we face the challenge of rising and changing powers, in nations in turmoil particularly in the middle east undergoing enormous political transformation. we are no longer in the cold war.

this is more like a blizzard war. it is a blizzard of challenges that draws speed and intensity from terrorism, from rapidly developing technologies and the rising number of powers in the world stage. despite the times we live in, there is reason to be confident. the operation that killed osama bin laden, in my view, has not only made clear to the world that we will do what we have to do but it is also -- it has also given us the greatest chance cents 9/11 to disrupt, dismantle, and to defeat al qaeda.

to do that, to be able to finish the job, we have got to keep our pressure up. if confirmed, my first task at dod will to ensure that we prevail in the conflicts we're engaged in. in afghanistan, we must continue to degrade the taliban. we got to trade security forces. we've got to help the government take ownership of their country so that they can govern and protect their country. in iraq, we must assure that iraqi military and security forces are prepared to safeguard their nation. so that it can become a stable democracy in a very important region of the world. as we do that, i am very aware that we must be highly disciplined in how we spend the taxpayers' precious resources. this committee well knows that

the days of large growth, on limited defense budgets are over. our challenge will be to design budgets that eliminate wasteful and duplicative spending. while protecting the core elements that we absolutely need for our nation's defense. i do not believe, based on my long experience in government and working with budgets, that we have to choose between strong fiscal discipline and a strong national defense. i don't deny that there will be tough decisions that have to be made and tough choices that have to be made. we owe to our citizens to provide both strong fiscal discipline and a strong national defense. finally and most importantly, it is the job of secretary of defense to be a tireless advocate for our troops and for their families.

it is their sacrifice and their dedication that have earned the respect of a grateful nation and inspired a new generation to volunteer to wear the uniform of our country. they put their lives on the line to fight for america. i will just as surely fight for them and for the families that support and sustain them. as director of the cia, i had no more solemn duty than sending young people into harm's way with their lives on the line. after we lost seven of our colleagues in afghanistan in december of 2009, i had to do what my colleagues in the military do all too often -- visit the wounded at bethesda, attend the ramp ceremony at

dover, offer a prayer at the site of an arlington cemetery graveside. a patriot who left this world to yawn. not one day will pass where i don't think of the brave souls who have fought and died and those who fight today for our freedom. as secretary gates emphasized in his last trip to the troops, there will always be, in my thoughts, and prayer. if confirmed, i pledge to you that i will always keep our troops for must in my mind and i will be a careful and accountable steward of our nation's precious resources and that we will have the strongest national defense in the world and that you will always have my best and most candid advice and that i will always, always seek yours.

as you know, i am the son of italian immigrants. my father used to say to me -- i -- that to be free, we have to be secure. that is the pledge that i make to you. i will do everything i can to keep america secure so that it can be free. i will do that if i am confirmed as secretary of defense. thank you. >> thank you so much. thank you for a powerful, moving, and straightforward statement. we have standard questions which we ask of nominees. before we take turns asking our own questions, i will put those questions to you now. have you adhere to applicable laws and conflicts of interest? >> yes i have. >> when asked to give your

personal use even of those views differ from the administration in power? >> yes i will. >> had assumed any duties are actions which would appear to present the outcome of the confirmation process? >> no, i have not. >> way we ensure that your staff composite deadlines established for requested communications including questions for the records in hearings. >> yes i will. >> will you providing cooperating with witnesses. >> yes i will. >> will these witnesses be protected from their reprisal? >> yes they will. >> when you testified -- lee testified before this committee? >> yes i will. >> will you provide documents including copies of electronic forms of communication in a timely manner when requested by a duly constituted committee or to consult with the committee regarding the basis for any good faith delay or denial in providing such documents? >> yes, i will.

>> thank you. we will be here all morning. we will then have a break for lunch and we will go into a classified session for this afternoon. minutestart with a seven- first round for questions. director panetta, you said that you support the july, 2011 date set by president obama for the beginning of a process of transferring increasing responsibility for afghanistan security to the afghan security forces and drawing down u.s. forces from afghanistan. president obama recently said that the size of u.s. troop reductions from afghanistan will be significant. director panetta, do you agree that the u.s. reductions from afghanistan beginning in july should be significant? >> i agree with the president. there are approximately

100,000 more afghan police than the work in 2009. the nato training mission in afghanistan is ahead of schedule in meeting the target of 305,000 afghan security forces by this fall. in addition, a new target of 352,000 afghan security forces by 2012 has been set to ensure that these forces have the specialized skills needed to sustain these units are the long term. i very much support that decision. do you agree that training and part offering with the afghan army and police in getting those forces as a lead and operations is key to the success of our counter insurgency strategy and afghanistan? >> yes, i do. >> pakistani leaders deny being aware of the presence of osama bin laden bin abbottabad.

it is counterintuitive to believe that none of their leaders know it but nonetheless that is not my question. the pakistan leaders are well aware and acknowledge their awareness of the sanctuaries in pakistan by the hikani network and the afghan taliban it quetta. they are attacking our troops across the border in afghanistan and they go back to their sanctuaries its pakistan. a recent defense depart report called the extremist network the most significant threat in eastern afghanistan. yet, the ikanis continue to enjoy open six border cross the border in pakistan. i think this is totally unacceptable. i'm wondering if you agree and which should be done. >> senator, i share your

concern with regards to the safe haven in pakistan. , particularly as it relates to groups like the akanis./ i strongly urge those in pakistan to take steps to do whatever they can to prevent these kind of cross border attacks and to prevent the safe havens that exist on the pakistani side of the border. this is a difficult challenge, the relationship with pakistan is that the same time one of the most critical and yet one of the most complicated and frustrating relationships we have. it is extremely critical in that we're conducting a war against our primary enemy in

their country. it is critical because of vital supply lines go through their country. it is critical because they are a nuclear power. there is the danger that those nukes could wind up in the wrong hands. at the same time, it is very complicated by the fact that they maintain relationships with certain terrorist groups, that they continue not to take aggressive action with regards to these safe havens, and they are concerned about the sovereignty results and criticisms of the united states when in fact my view is that the terrorists in their country are probably the greatest threat to their sovereignty. having said all that, we have to maintain the relationship to do everything we can to try to spread -- strengthen their relationships so that both of us can work to defend both of our

countries. >> director panetta, the president has called for $400 billion in reductions to national security spending over the next 12 years. do you have any understanding or a proposed breakdown of that $400 billion as to how much he is proposing for reductions in pentagon spending? how much of that is intelligence spending? how much is he proposing to reduce in the home less security department? >> no, i do not. >> can you try to find that out for us? if you give us an estimate for the record -- >> i will certainly ask whether or not that decision has been made. >> do you know whether we will receive a budget amendment for the fiscal 2012 dod budget?

>> i don't know the answer to that ban on the question of torture, and your answers to the committee said the following -- i will insure that all interrogations' conducted by the department of defense personnel are conducted consistent with the army field manual and in accord with the geneva conventions. is water boarding consistent with the army field manual? >> i have taken the same position as president of united states. i think water board crossed the line with regards to interrogations'. the president outlawed the use of that plus other enhanced interrogation techniques. in an executive order he issued when he first came to the presidency. >> recently, i don't want to

switch gears to much because time requires that we do that -- as senator web and i recently went to zero canal, guam, and center web was in korea before that, senator mccain and senator web and i -- centre mccarren obviously has a great personal experience in this area -- we proposed changes to basing plants on okinawa and guam. we issued a review of the plants in korea because we believe that the current plans are unrealistic, unworkable, and affordable. independently, the gao concluded the cost of these military realignments were higher than expected. in many cases, there were largely unknown. in a highly critical gao report

of this direction that we are currently moving. i am wondering whether you are familiar with this issue and it confirmed in any of and whether you are familiar with these issues are not whether you will agree to review this matter and work with us to find a solution that helps advance our strategic objectives in the reason. we had strategic objectives and the reason and if they are currently on affordable, they are unknown in terms of cost and whether you be willing to review this matter and work with us? >> yes, i will. you discussed this with me when i -- when i met with you and also center web discussed his concerns about that area. i agree with you that is a very important strategic area for the united states. we have to maintain a presence there. there are many issues that have

to be resolved and worked on. i look forward to working with you, senator mccain, centre wave -- center web and others to find out what the most cost-effective approach would be. >> thank you. >> thank you very much. what is your assessment of the battlefield situation in afghanistan cents we inaugurated the surge? >> the assessment is that we have made progress with regards to security in that country. it is fragile and reversible. i nevertheless believe that progress has been made to try to advance security. we also have made good progress in training the forces there in afghanistan both police and

military force. i think the area we are -- where greater progress means to be made as a government side. we want to make sure they improve our government so they can ultimately take responsibility for the country. >> and so, would you agree -- when you point out is fragile and reversible, i think that is absolutely accurate. would you agree with secretary gates repeated a strict statements that the withdrawal should be modest? >> i agree they should be conditions-based variable live up to secretary dates and general petraeus and president to provide with that number should be. >> if you or the secretary of defense when that decision is made, obviously, you will have significant influence. he just came from a position where you have a good assessment of the military situation. i think it is not inappropriate

for you to answer when asked if you agree with secretary gates and his assessment that the withdrawal should be modest. >> senator, if i am confirmed, i will have to obviously arrived at a decision myself. i will have to ultimately present that to the president and i am not position -- in that position now and that decision rests with general petraeus and secretary gates and the president. obviously, i have tremendous admiration for secretary gates. i pretty much what the and and and and these issues. with regards to specific numbers, >> i wasn't asking for specific numbers. on the subject of iraq, if the afghan government and all its elements agree there should be a residual u.s. military presence in iraq particularly in three areas, air defenses,

intelligence capability, and security in the areas around kirkuk in iraq where there have been significant tensions, do you agree that would be wise thing for us to do? >> i believe the prime minister of maliki and the iraqi government request that we maintain a presence there that that should be to seriously considered by the president. >> do you think it would be in our interest to do that? >> there are 1000 al qaeda that are still in iraq. we saw the attack was made the other day. it, too, continues to be fragile situation. i believe we should take whatever steps are necessary to make sure that we protect whatever progress we have made their.

>> do you know of anyone authority or in the congress or the administration who believes we should send ground troops into libya? >> i have not met anybody at who supports that. >> i have not either. i think all of us -- would be a great mistake. do believe is the proper role congress to restrict the powers of the president of united states to act? we were around when there is a vote of cut off of funds. right or wrong, that was the appropriate role of congress. does it worry you if the congress begins to tell the commander in chief as to exactly what he can and cannot do? >> i believe very strongly that the president has the

constitutional power as commander in chief to take steps he believes are necessary to protect this country and protect our national interests. obviously, i think it is important for presidents to consult and have the abies of congress but in the end, i believe he has the constitutional power to do what he has to do to protect this country. >> i agree. in 2007, the last time we went through a very serious crisis that was concerning whether we should withdraw from iraq or not, i see some parallels. we're getting it rising war weariness in american people. and one thing we did at that time was set up some benchmarks that we expected to be met by both the iraqis and the united

states which i recall, there were 13 or a number of those. over time, most of those benchmarks were met. do you think it would be appropriate for us to do the same thing as far as afghanistan is concerned? we can measure progress by certain metrics. i think it would be important in order to gain or keep the confidence of the american people that we should set up some benchmarks for progress both in afghanistan and as far as pakistan is concerned since we're sending billions of dollars of taxpayer money to pakistan. >> i think we all know what the fundamental goal is here which is to develop a stable enough afghanistan that will never again become a safe haven for al-qaeda or --

>> my specific question the ---. >> working with the president and establishing some of those areas where we need to make progress

the iran nuclear ambitions and to end them. however, as president obama has said, all options have to remain on the table. i want to ask you whether as

secretary of defense, you'll consider it to be one of your responsibilities to have credible military plans to strike and destroy the iran nuclear facilities if the president as commander-in-chief decides that it is necessary to use that option. >> in line with the president's statement that we should keep all options on the table. >> let me approach afghanistan this way -- i thought the correct andade a courageous decision in 2009 in deciding to raise the number of our forces in afghanistan by 30,000 +, a so-called afghanistan surge. at the time, a statement was

made that we would begin to draw those troops down around july of this year, 2011. there was a lot of anxiety in the region, particularly in afghanistan and pakistan about whether that was the beginning of a kind of early withdrawal and a retreat from the region. discussions were had particular between us and the afghans and present obama settles with president karzai on a plan that will begin the transition around july of this year but the goal is to remove affectively all of our forces unless there is a mutual agreement to the contrary before then by the end of 2014. u.s. said today and in your prepared answers that you thought we were making measurable progress in

afghanistan. but that the progress was reversible. rather than asking you to adopt an adjective that smaltz has put sayhat, is it fair to sai that the standard you apply to the drawdown of american forces that would begin of july this year, that it not be so great as to risk the gains we have made which you have said are reversible? >> there is no question that we should not take any steps that risk the gains that have been made. i have great confidence that general petraeus and secretary gates and the president will make the right decision in a transition that will take place going towards 2014. >> is it fair to say that if you are confirmed that the goal here

that you see is to turn responsibility for security of afghanistan over to the afghans at the end of 2014 and not to jeopardize our capacity to do that before then? >> that is absolutely correct. at the lisbon conference, 48 nations plus president karzai made the decision that there would be a transition going toward 2014. it would be then that hopefully we would be able to transfer responsibility. we should do nothing that jefferson -- jeopardize is that pat. >> i appreciate that the love me brief you -- but let me read do something from secretary gates. "once you have committed, the success of the mission to override everything else because the most colleges -- cost a thing of all would be to fail." did you agree with that? >> absolutely.

>> i appreciate your answers to those questions. let me move to another part of the world. at the end of the last century, if you ask most people up here and the defense and state department and cia would be our focus in this century, they probably would have said that the asia-pacific region would be the strategic center of gravity of the 21st century. we were necessarily distracted by the attack on us on 9/11 and i think we responded with remarkable courage and effectiveness. i think that the asia-pacific remains the strategic center of gravity for the 21st century. we have found that there is an anxiety among our friends from

asia about china's growing military capabilities and america's staying power and commitment to the region. i wanted to give you an opportunity to speak to that anxiety, that if confirmed as secretary of defense, not withstanding the budget pressures on the u.s. government, would our strategic involvement in the asia-pacific region in your opinion continue to be a national security priority? >> absolutely, i think that region is very important to us from a strategic point of view. we have to maintain a presence in the pacific are a breed that and i think in line with that, we have to maintain a relationship with china. we want to build that kind of relationship for the 21st

century. i think it is extremely important. there are concerns about some of the things they are doing in modernizing their military. at the same time, i think we have to be able to work with them in terms of scale and transparency so that we are working together and not in opposition to one another in order to make sure that we protect the security of that region. >> on your watch as secretary of defense, you don't anticipate any withdrawal or retreat of america's commitment to the asia-pacific? >> not at all. >> thank you very much. >> centre chambliss. >> thank you for your willingness to continue to exhibit great public service. you and i have had the privilege of working together for many years since i was a freshman member of the house. you were a member of the clinton

administration and i don't need to talk to you about how many years that has been. i respect your service and value our friendship. i would say that i know you will be the first to credit the many hard-working, very professional men and women in the intelligence and military community that led to the successful takedown of osama bin laden and you would be right to do that. without strong leadership at the top, that mission would not have been successful and i get a lot of that credit of that mission to you and it is well deserved. you and i had the opportunity to talk about the issue of rising health-care costs in the department of defense budget when we visited a couple of weeks ago. i notice you had several questions on the issue in your policy questions and i appreciate your responses. i don't have a question on this but as the chairman said earlier, you will have a very difficult job when it comes to trying to find savings and become more efficient at the department of defense.

there is no bigger expense, at least from the standpoint of increasing annual late, the health-care costs. i want to reemphasize the fact that this an extremely important issue and we need to get our arms around it and i look forward to working with you. i encourage you to think creatively. i want to go back to the line that senator mccain was addressing on afghanistan. regarding the troop withdrawals, i think it is clear that any operational perspective that the withdrawal makes no sense. it may make sense from a domestic political perspective. may make some level of sense in terms of waking up the afghans. the fact that we will not be there forever and that that they

have to set up to the plight but i am concerned that a significant withdrawal of u.s. forces will reverse the progress that we made in afghanistan and that the afghans have made. i am glad to see you say you support a response will conditions-based withdrawal. however, i would prefer their to be no withdrawal until it is clear that the gains we have made will not be reversed. my question for you is as we withdraw troops from afghanistan, if it becomes clear from an operational perspective that the withdrawal is negatively affecting progress and stability, will you advise the president that the withdrawal should be stopped and, if necessary, additional u.s. forces be sent back to afghanistan? said and as the president has said and the secretary has emphasize, this has to be a conditions test

based withdraw. that means you look at the conditions on the ground. we need to do everything we can to try to call police stay on target with regard to the 2014 date. it is conditions based and based on what changes take place, the president and secretary would have to make adjustments. >> i would hope for my conditions-based standpoint, leon, that you would give strong consideration to the safety and security of our soldiers. i know they are of #one importance to you. if withdrawal of troops puts our men and women in gridder harm's way, -- in greater arms way, i would hope that we would cease the withdrawal. i hope that would be your recommendation to the president. >another issue i want to bring up that we have discussed is the issue of tactical aircraft and

this generation fighters. -- and fifth generation fighters. secretary gates argued that f-35 made the airplane of the future. however, at a recent hearing, last month, the secretary indicated that dod has taken money out of that program to buy fourth generation fighters. not only are these fourth generation fighters costing billions of dollars but they will be in the inventory for probably 20-30 years. we will be paying to maintain and even at a greater cost. there utility is greatly limited against any kind of modern threat. in my view, this is not a very good way to spend taxpayer dollars. what is your perspective on this issue? if confirmed, will you be

committed to preserving u.s. supremacy in air dominance and ensuring our resources are spent most wisely toward that end? >> obviously, i want to make sure that we have the very best in terms of our fighter planes. 35 is being35he f- developed as the next-generation fighter but there are substantial costs associated with that. i think we have to watch it very carefully. i want to assure you that one of my responsibilities in line with what senator mccain said is to take a very hard look at all weapon systems to make sure they are cost-effective and they are providing the very best equipment our forces need. >> what concerns me about where we are with that program is exactly what senator mccain

alluded to and that is that we just seem to be out of control. we keep moving the goalposts with contractors and blaming contractors for an increase in costs when frankly part of it is due to our inefficient management of the system. if we are going to spend the kind of money that we are committed to spend on that fifth generation fighter because -- that is where we are headed. we all know that. we've got to have that airplane in the inventory. the decisions that will have to be made by u.s. secretary of defense relative to procurement, to acquisition, as well as the testing of that airplane will be critical. you bring a wealth of knowledge from that perspective from your years at omb and where you are today. again, we look forward to

dialogue with you and this committee on that issue as well as our other acquisition issues that are going to be before you. let me ask you one other matter relative to libya. i notice that you agree that the gaddafi regime must go. how're we going to do that? >> as the president has said, that is the objective. it has to be done by a number of means. number one, we are bringing strong economic sanctions against them. we are also bring strong diplomatic pressure against them. we have implemented embargo and more importantly, the work that nato is doing pursuant to the un resolution and the nato forces

that are there. are bring tremendous pressure, i believe, on them not only fighting to protect civilians but to implement the no-fly zone and in addition to that, target the command and control elements of the regime. i think all those factors have to continue in order to put pressure on gaddafi. frankly, i think there are games that have been made. we have seen the regime weaken significantly. we have seen the opposition make gains both in the east and west. i think there are some signs that if we continue the pressure and stick with it that ultimately that gaddafi will step down. >> thank you for this service and i look forward to continue to working with you. >> senator reid. >> thank you for your extraordinary public service and

particularly in the last few months, you're decisive and courageous advice to the president was led to the successful raid against osama bin laden. it would not have been a successful or affected without your participation. thank you personally for your friendship over many years. let me return to the topic of afghanistan. we're looking at a decision shortly that will be based on conditions on the ground but strikes me and implicit in what you say it your testimony, those conditions on the ground might be more relevant according to pakistan and afghanistan. as long as the government of pakistan at least appears to see some of these groups, these terrorist groups and their soil as strategic assets and liabilities, our operations in afghanistan are going to be very, very difficult.

going to the real conditions on the ground, your comment on whether those conditions are really more about pakistan, our focus has to be there as much as afghanistan. i would include in this context some type of regional dialogue including pakistan, afghanistan, and india. what are your comments? >> i would agree with that. it is pretty clear that we cannot succeed in afghanistan if we are not succeeding in pakistan in terms of controlling the safe havens and the cross border operations. we've got to work at both in order to ensure that we are able to stay on path with what we would like to achieve in afghanistan. in addition to that, i agree that this is a regional issue and to the extent that the countries in the region can work together and relate to each

other instead of being suspicious of each other, creating the kind of dynamic that frankly has not been very helpful. i think it would be in the interest of peace in that region if we could get all three to continue to work together to advance the same goals. >> one of the points i believe your predecessor made and we are recommending an for example reservists -- one of the challenges you have is following an extraordinarily talented, successful, and decent human being. you have a challenge. secretary gates pointed out that -- how important non- dod agricultural operations are. we're also getting into the spectrum of these violent climate episodes throughout the globe.

there is a real danger here that those budgets might suffer. in afghanistan, my colleagues in the foreign affairs committee has released a report criticizing the bill stage of the operation. can you comment upon that partnership and how critical it is? when we look at the conditions on the ground, we could be successful interdicting terrorist groups, seizing caches of weapons and even interdicting transmission from pakistan. if there is no political capacity or governmental capacity on health care education or anything, we will still have a population that is disgruntled and probably destructive towards us. >> i agree with what you said. it has to be the whole government approach. as we deal with these issues.

the state department place an important role in providing assistance to individuals to insure that an area remains secure. aid, the education area, the justice department provides assistance. the area of agriculture also provides some important assistance. i know the department of defense is our primary military weapon in terms of securing areas. if we do not follow it up with these other important assets, we will never be able to fully secure these countries. >> let me change topics for a moment. it strikes me that -- this is not particularly a great insight -- i am old enough to remember when there were three dimensions of conflict, air, land, and say.

see. there's a whole new dimension, cyber. i don't think we know enough yet to be fully converse of what can you comment briefly on the strategy that you will try to develop? i assume that strategy will provide some deterrence. i assume it will do pre-emption, offense/defense and as was just indicated, the policy within the context of the rules of war, what would constitute some type of attack. you are stepping in at a critical moment where we are just beginning to develop a strategy for new -- for a new dimension of warfare that we have not confronted yet and your leadership will be critical. >> there is no question that the

whole arena of cyber attacks, developing technologies, in the information area, represents a potential battle front for the future. i have often said that there's a strong likelihood that the next pearl harbor that we confront could very well be a cyber attack that cripples our power system or our great, perhaps our security systems, our financial systems, our governmental systems. this is a real possibility in today's world. as a result, i think we have to aggressively be able to counter that. it will take both defensive measures as well as aggressive measures. most importantly, there has to be a comprehensive approach in government to make sure that those attacks don't take place. i have a huge responsibility of

being confirmed in his new position in dealing with the cyber area. my goal would be to work closely with them and others to develop not only the capabilities but also the law but i think we need to have in order to determine how we approach this challenge in the future? >> just one final topic -- there is an acquisition bywave coming as he recapitalize. that has been pushed off a bit and that is -- it has been deferred a bit but it is coming. one aspect is that it is not simply the sheer number of systems that we have to buy, land, sea, and air and others, is the price tag on each of these systems. i know secretary carter has been working hard to make

affordability part of the design. all those efforts will be necessary because there will be no room with even -- within even a generous budget that has to do everything we have done. what your comments again? >> in the briefings that i have had, it is obvious that this is an area we have to pay a lot of attention to. \ because of the efficiencies and competition and the nature of expanding contracts that have taken place there. we have seen these weapons systems grow in cost. it takes an extraordinary amount of time from the beginning of moving the kind of weapon system to the time is finally developed, finally deployed, it almost becomes outdated.

we've got to improve the process. i know congress has taken steps in that arena. i look forward to working with you and the members of this committee to take greater steps in order to insure that we are looking at every possible efficiency in the procurement to read that in order not only to save dollars but make sure that we are getting better and equipment. >> senator brown. >> thank you. good to see you again sir. i look forward to voting to confirm you. thank you for holding this hearing, mr. chairman. i echo lot of the same thoughts my colleagues do regarding the cross border operation -- cross border operations. the tremendous amount of aid we give to pakistan which is over $4 billion, gives me deep concern that if we try to move forward with completing our

mission and bringing our men and women home in afghanistan, that we're having these areas where you have the safe havens yet we are giving them billions of dollars in aid. are you with us or not? what is your position with regard to carrying the message to people like me and others in people like me in congress are getting frustrated with that complicity. >> secretary clinton, chairman mike mullen and myself, my deputy, who was just here, have all made the same point. we need to have their cooperation. we need to have their partnership in confronting what is a common enemy. terrorism is not just our

problem. it is their problem. they are the subject of attacks every day from terrorist. s. it is in their interest to take action to control terrorism within their borders. in a relationship and a partnership, we expect a two-way street. it has to be two ways to protect both of our countries. >> the fact that bin laden was there -- if they did not know he was there, i do not believe it. i am hopeful that message can continue. when i went over there, i conveyed that same message as well. when you are walking down a hallway and a media group grabs you and says, what is the mission in afghanistan? what should i convey to the

people in massachusetts now that we have made progress there? what should i can they? what do you can they in your everyday conversations? what is the mission in afghanistan right now? >> the fundamental mission in afghanistan is to provide stability so that that country does not become a safe haven for al qaeda. >> your plan for achieving that mission by setting benchmarks that will hopefully be attained so we can set back and bring our men and women home -- let me ask you that first. >> the president has made clear that there are goals that we are continuing to work on. we need to weaken the taliban. we need to develop the structure

in afghanistan and in the army so they can assume these responsibilities. we can develop the government so they can provide greater stability for the future. each of these areas need to be focused on so that we can arrive at our goal. >> is it your opinion that there are people in the government to do that? can they be self-sufficient? >> i think there is. in the discussions i have had, i think they want their country to succeed. it is not always easy. this is a tribal society. >> there is very little interaction with the central government. >> it is difficult. they understand that, ultimately, this is their country. they are going to have to

provide the security. >> i am also deeply concerned. i keep hearing reports that money we are providing is going out to terrorists. is that something you have a comment on? >> we have to continually over see that to make sure that does not happen. i do not deny that there has been corruption in that country. we have to ensure that one of their responsibilities as a government is to make sure that does not happen. >> just to shift giears a shift-- gear a little bits. . people are hopeful they can share in the privileges that people in our country have. there is deep concern about what is left after these transitional

periods. we have given billions of dollars in military equipment. in egypt, they will have upcoming elections. depending on who is in power, they are still receiving a bang. -- aid. i am concerned about israel and their safety and security. i am concerned about that region. what are your thoughts on our relationship with israel and the transition going on in the middle east? >> we will and have to continue to maintain a strong relationship with israel and that part of the world. we have to reach out to other nations in that part of the world if we are going to preserve peace in that region. this is an area that is in great turmoil. a lot of countries are going

through turmoil -- tunisia, egypt, bahrain, yemen. there are a number of countries that are dealing with uncertainty. the united states has to work with each of these countries to ensure that they reduced violence, to ensure that they are recognizing some degree of human universal rights, and that they are implementing economic reforms. it is not easy. there are tremendous changes going on. we have to play a role in what is developing in the so-called arab spring. as the spoke to that. if we do not, there are other countries in that region like iran that will try to influence what will happen. we cannot afford to let that happen. >> thank you senator brown. senator akaka. >> thank you, mr. chairman. i would like to say aloha and

welcome to director panetta, who is a dear friend and a former colleague. there are so many things we can talk about. i want to tell you that i was impressed with your opening statement. what else can i say as we consider a person who was nominated by the president to be secretary of defense, who would be a tireless advocate of our military, and who will bring about support and sustain them. ? this will be in your thoughts and prayers. having a free country, a country that is skilled and you

will continue to bring strong discipline and national defence for our country. with all of this, i want to wish you well. you certainly have my support. you will face significant challenges if confirmed. the men and women of the armed forces are involved in two major conflicts that are taking a tremendous toll on our armed forces. we must do all we can to care for them. fulfilling our sacred obligation is dependent on department of defense cooperation. you stated in your response that you would ensure that the department of defense continues to work closely with the

veterans administration to support members of their family. we talked about working on the collaboration between the department of defense and the veterans administration. as we carry on into the position of secretary, you certainly have my support. if confirmed, what will be your top priorities as you look to care for men and women in uniform and their families? >> senator, my first and foremost priority is to protect this country. i cannot do it unless we have good fighting men and women who are willing to put their lives on the line in order to defend this country.

i think we owe it to them as a result of that, and we owe it to their families, to make sure we are doing everything possible to meet their needs. providing the kind of health care, the benefits, the counseling that is necessary, particularly for wounded warriors, making sure they can transition to the veteran's administration in a seamless way -- these are areas i have to pay attention to. i have seen it firsthand. these kids are out there and they are putting their lives on the line. we have asked them to go their time and time again. we have got to make sure they know they are fully supported in this effort.

it is going to be my job if confirmed as secretary of defense to ensure we are providing those benefits. i want to work with people like yourself who have been working with this for a long time to make sure we are covering all of the bases. >> i am impressed. you told us by steps of what you are planning to do. social reforms. i thought it was unique what you wanted to achieve. the secretaries who work together and share their concerns as well -- you want to work on a pentagon establishment. this is important to regard congress as a partner and to

deal with the challenges of nations that are rising and changing, as you mentioned. the chief financial officers act of 1990 required the department of defense to prepare financial statements, which were found to be ultimately unreliable. in 2010, the department was required to provide auditable financial statements by 2017. i believe in accountability. we want to complete and accurate financial information from the pentagon. this would allow the pentagon leaders to make better informed a limitedin

environment. if confirmed, what will you do to insure the department meets these requirements? >> senator, i was concerned in finding out that the department would not be able to achieve full auditability until 2017. i understand how areas of the budget develop. the american people should know that there is auditing that does go on in each of these areas. as a department, we should be able to audit that department. if i am confirmed, one of the first things i will do is to see if we cannot take steps to improve on that timetable so that we can say to the american taxpayer that what we are spending on national defense is being fully audited.

>> d.o.d. is one of the few departments that has recognized the importance of maintaining its language and cultural awareness capability. they lead the national language service corps and have activities with other federal agencies. what are your thoughts on the importance of cultural and foreign language capabilities within the department of defense? >> i am a big believer in language training and in getting our people equipped with the ability, not only to speak the language, but to understand the culture of the countries we are dealing with. it is good for each individual to have that capability.

it is important to our national defense to have that capability. at the cia, i have developed a requirement for analysts and operations officers to have language capabilities. it makes them better individuals and better intelligence officers to have that capability. at the defense department, we need to also encourage greater language training so that they understand the language and the culture of the countries they are involved with. having that capability makes us much better at doing our job. >> thank you. >> thank you senator akaka. >> thank you, mr. panetta, for your leadership and service to our country. cutpresident's proposal to $400 billion, do you agree with

that proposal? is it a realistic number in terms of our national security, preserving our national security? >> obviously, i agree with the commitment of the president to try to take action to reduce the deficits. . i do want to say that there is a comprehensive review that is going on that the president himself stated would take place. that comprehensive review is looking at a number of issues related to the defense department in order to determine what are the right areas, what is the right transition in order to achieve that savings. i look forward to the results of that comprehensive review. >> as a follow-up, you expressed

your admiration for secretary gates. i share that admiration for his service to our country. you made recent statements expressing concern over the $400 billion proposal. you said it cut into the meat in terms of the muscle up our defense. do you disagree with him on that front? >> no. i share his concerns about the possibility of calling out our forces -- hollowing out our forces and implementing some kind of formulaic approach in cutting defense. we have to look at each area to determine where we will achieve savings. obviously, i share those concerns. i want to look at that comprehensive review to make sure none of the concerns secretary gates has raised or

that i am concerned about take place in seeking those reductions. >> in conducting that review when you get into the position of secretary of defense, if you disagree that $400 billion is a reasonable number and could jeopardize our national security, would you express your opposition to the president on that? >> if the end result of that comprehensive review were to come to that conclusion, i would share those concerns. i do not think it will. if there were something that indicated that our national defense would be impacted, i would share that with the president. >> i wanted to ask you about the cia and interrogation. does the cia currently conduct interrogations' of high-value targets -- interrogations of high-value targets?

>> when a high-value target is captured, there is a high value interrogation team that comes together that involves the army, the fbi, and the cia working together as 18. they will go -- working as a team. they will go and do the interrogation as a team. >> does the cia do the interrogations themselves? as i understand, while the dissipating in the haight, they have not been doing -- while participating in the hague, they have not been doing the interrogations. >> they will share with each other what questions should be asked.

it could be the fbi or the cia. everyone's in a while, the cia asks questions. >> is there anything keeping the cia from conducting interrogations? >> if intelligence is the primary objective, the cia individual becomes central to the questions being asked. that is the way it works now. if there is an emphasis on that, that is one case. if it is a military case or an individual that could involve follow on the military, they would take the lead. they work as a team and they do

it on a case by case basis. >> nothing prohibits the cia from being the lead in conducting investigations? to your knowledge, does it happen now? i understand it is a team. >> it is not the direct interrogation that used to take place early on in this decade. it is much more of a team approach. that is the way it works. >> i wanted to follow up with respect to the detainee treatment act. do you agree with all of the provisions of the detainee treatment act, including the provisions to provide legal authority for interrogations'? -- interrogations? >> i honestly, i agree with the

law. >> you talked about your view on waterboarding. do you think all enhance interrogation techniques crossed the line? >> i do not have the same you with regard to all of the other enhanced techniques, but i do with regard to waterboarding. >> right now, under the president's executive order, interrogations is limited -- are limited to the army field manual. there are some interrogation techniques that do not cross the line and are not involved in the manual. >> it is primarily the army field manual that is the primary diet to interrogations. >> to the extent that some of

those techniques may be permitted, would you necessarily disagree with the law contained in the detainee treatment at? >> it is permitted under the army field manual, i would support that. >> my time is up. i appreciate you answering my questions. >> thank you, senator a lot -- senatorsayotte. -- senator ayotte. >> mr. panetta, you will inherit two wars. you will be passed -- tasked with reshaping the department of defense and taking care of military families.

with respect to afghanistan, there has been quite a bit of discussion about the need for benchmarks to do assessments for where we are in the transition to the afghanistan capability of defending itself so that it can govern itself going forward. i have been a prime supporter of the benchmarks with regard to iraq and with respect to afghanistan as well. i am introducing legislation today that will require benchmarks to evaluate progress being made toward the transition, security responsibilities to the government of afghanistan. the bill would call for benchmarks on transition to be included as part of the already established provisions for

afghanistan. i think it was being -- was the 1230 and 1231 reports. i am impressed with your support of evaluation methods so that we are not in a gray area with regard to whether we are winning or losing. this is an opportunity to describe what level of progress we have made. i am encouraged by many of my colleagues on both sides of the aisle talking about the benchmarks as well. if we intend to transfer security responsibility to the afghan government by 2014, it is important to mark our progress. do you have any preliminary thoughts as to the kinds of

things you might look as as part of benchmarking to help you evaluate conditions on the ground as to whether we are making satisfactory progress to say we are 25% there, 50% there or whether we have 50% left to go? >> to establish any metrics or guideposts, it is important that general petraeus and our diplomatic leaders and the administration participate in trying to line did the five those areas that are important. clearly, levels of violence is an important area to look at. a district assessment that looks at each district and tries to determine disability in each of those areas, -- determine the

stability in each of those areas, developing the afghan army and police and how they are performing. that is an important element. obviously, the government responsibilities within afghanistan. those are all key elements that need to be evaluated. >> in your view -- it is a unique view as the director of cia -- can you give us some idea of the impact the death of osama bin laden might have on the campaign going forward in afghanistan and keeping it from a safe haven for future al qaeda operations? >> with regard to specific intelligence on that, it is probably appropriate in another forum. it is enough to say that the death of osama bin laden --

there is no question it impacted al qaeda. he was their leader and it impacted their capability. obviously, there are a number of operations that were impacted under their control and command operations. having said that, they still remain dangerous. they are dangerous with regard to the efforts they continue to work at in pakistan. one of the concerns i will share with you is that i think we have to pay attention to these notes that are developing. al qaeda has moved some of its operations to places like yemen, somalia, north africa. those are areas we have to continue to focus on. yes, it has had an impact. it has weakened them.

they still remain dangerous and we have to go after them. >> i agree with you and i appreciate that view. we have had a touchy situation developing with respect to pakistan in terms of what level of support osama bin laden may have had from anyone involved in the pakistani government. it is a complicated relationship. we understand. the american people are quite concerned about double-dealing. you cannot have your friend be your enemy at the same time and have your friend working against you. do you think the relationship with pakistan is transparent enough at the present time? is there something we can do so that the american public can

make a better determination of that relationship that we share with the government of pakistan? >> we have to continually work at that. we have to work at developing a relationship of trust with the pakistanis. i do not know if we are totally there yet. there are areas where we have good discussions and good communications. there are a number of areas where we do not have that level of trust or communication capability. we have to work at that. we have to develop it. it is in the interest of both countries to have a trusting relationship. terrorism is an enemy not just of the united states. it is an enemy for pakistan. >> do you think an internal investigation with some level of transparency within their government to try to determine

responsibility for anyone who may have had involvement in trying to protect the presence of bin laden in their country -- that that will be fruitful? if it is through the fall, that it will be looked at as credible by our government and by the american people? >> at this point, we do not have any intelligence to indicate there was any relationship here. having said that, i do believe that the pakistanis are conducting several investigations at different levels to try to investigate what took place. it would be important to see what the results of those investigations are. >> thank you. good luck in your new position, which you are about to achieve. >> thank you senator nelson.

senator gramm? senator graham? >> thank you. i think the president has put together a top-notch security team. you are an important part of that. now for the tough questions. there is no place you can go to protect you from the justice of the american people. my general belief is that this war is more complicated than killing terrorist. do you agree with that? >> yes. >> we have to fight the terrorist in their own backyard. don't you agree that takes more time? >> it absolutely does take more

time. >> do you agree that the payoff is more enormous if we can get it right? >> that is right. >> what happens if we lose in afghanistan? >> if we lose in afghanistan, we not only create another safe haven for al qaeda and for their militant allies, but the world becomes a much more threatened place because of that loss, particularly in that region. >> i cannot agree with you more. what do i tell a family in south carolina that has lost a son or daughter in afghanistan to an i.e.d. that we cannot do anything about? what do i tell them? >> that is one of those situations that is frustrating

and enduring -- and angering. we have got to say to that family that we are not just walking away from that responsibility. we are continuing to put pressure on those countries and about. >> i could not agree with you more. i trust you and general petraeus to deliver that message. on behalf of the people of south carolina and most members of this committee, if you are living in pakistan, you need to choose. it is in your interest to fight the people who would undermine afghanistan and pakistan. i am all four winning in afghanistan. pakistan needs to get with the program one way or another. the pentagon itself. do you agree that the system we have to provide weapons -- the

more time it takes to develop a weapon, the more money the contractor makes. isn't that kind of stupid? it really is. i do not blame the contractor. i blame us. what if we said to the contractors, you are welcome to bid on major weapons systems, why don't you share 25% of the development costs? if there are any overruns, you share in the overruns. >> i think that is a suggestion worth looking at. >> one thing i would like you to do is go back in the past. how much money would we have saved in the last 20 years if we had had that arrangement? it is a way to save money and get weapons done quicker. when it comes to iraq, if the iraqis asked us to provide some

troops in 2012, secretary gates said he thinks that would be smart. do you think that would be smart to say yes? >> yes. >> do you think secretary gates has a pretty good view of what is going on in the world? if he said 5000 makes sense when it comes to do live with trawl, withdrawal, do you agree with that number? >> would you consider that request? positional petraeus' and the president also position -- all that should be considered. they have a pretty good view.

>> when it comes to libya, if gaddafi stays, what does that mean to our national security interests? >> it impacts on our national security interests if that happens. it sends a terrible signal to other countries. >> do you think it tells the iranians that you do not have to fear america when it comes to developing nuclear weapons? >> it tells them our word is not much if we cannot stick to it. >> when it comes to detainee's, if we captors someone tomorrow -- when it comes to detainees, if we captured someone tomorrow , a high-value target, do we put them in jail?

can i tell you with admiral mullen said when asked him that question? he did not have an answer to that question. do you think that is a smart policy to be a nation without a jail in the war on terror? >> we need to provide for detainment of these individuals. >> guantanamo bay is a good candidate. it is the only one left. am interested in making sure afghanistan never becomes a failed state. secretary gates said today and in february when i asked him this question that he believes that joint basing past 2014 where you would have american

air power left behind in afghanistan in a joint in climate in training in counterterrorism if the afghans requested would be a good policy for us. do you generally agree with him? >> the president has made clear that we have to make a long-term commitment to stability in that region. >> i will read what secretary gates said to my question. "a security agreement with afghanistan and some kind of joint facility and training for counterterrorism beyond 2014 would be in our interest." do you think that is a reasonable statement? >> i think is worth looking at. >> you are taking over at a time when the budget for the nation has never been more out of whack. you have got a big agenda to

fulfil. what would you tell the american people in terms of the attitude we need to take as a country? address their war weariness and tell them why we should stay behind in iraq and why we should consider a long-term relationship with afghanistan. why is it so important that we continue to stay in the fight after 10 years? >> it goes back to my father's statement. if you want to be free, you have to be able to establish some kind of peaceful solution to these challenges abroad. >> thank you, a senatorgraha -- thank you, senator graham.

senator mccaskill. >> thank you. part of our mission is to secure and stabilize and enhance the infrastructure. i want to commend to you and ask you to direct the folks who work with you to pay attention to some of the findings on the commission on wartime contacting. they issued a report last friday. it is full of basic information that seems to be escaping us in the area of contacting and contingency operations. that is two important factors. one is security and whether or not security is available and appropriate to support the building of projects we have put a lot of money in. we saw this in iraq over and over again. we would build a power plant.

we would work on an oil refiner we and two months later, it would be -- and oil refinery and two months later, it would be blown up. the second one -- this report came out on friday and it was an important report -- that is sustainability. we have white elephants all over this part of the world brought to you courtesy of the american taxpayer. the the sustainability part is -- i will read you one part of the report. a project carefully planned, well executed, and economical. it will be wasteful if the host nation cannot provide a trained staff, provide fuel for necessary maintenance or produce the intended outcomes. we have one of these white

elephants we spent $300 million on in kabul. they made a commitment to us that they would fuel it and now they say they cannot afford the fuel. this makes it complicated in terms of the technology. now it is used as a backup for buying electricity from other countries. this is a great example. it can be replicated over and over again. i understand the mentality. i respect general petraeus and his strategies in terms of counterinsurgency. there is this myopic focus. if we can build this project and put people to work, this is good. this is what counterinsurgency is all about. they do not think what it does point to look like in three or four years. especially -- what is going to look like in three or four

years. this is not a nation that is ready to take over anything, including some of these projects we are building. i think if we do not begin analyzing sustainability at the front end -- i will make a formal request to you that every project being built right now whether it is a road or a health care center or a school -- every project be analyzed right now for sustainability. if it is obvious it will not be sustained, we have to pull the plug. this is tens of billions of dollars that have gone down a rat hole because we did not think about what happens when we are finished building. it is really important. this is the hardest question. you and i talked about this.

what are the conversations that are ongoing? what are the plans about how afghanistan, with their meager tmp, how do they afford what we are building them in the projects and his army we are building for them? it is difficult for me to figure out what happens to this army when we leave? they cannot afford it. >> on your first point, i want you to know that if i am confirmed, i really do want to work with you closely with regard to the contacting issue and sustainability. i share your concerns. i know how that has developed. at the same time, we have not paid enough attention to that issue. i would like to work with you in trying to improve that aspect.

with regard to the issue of afghanistan, i share your concern about where they are going to draw the resources they need to sustain the army and the police force and to be a country, to be able to carry on their responsibilities. that will be the governance challenge we will face their, to ensure that as a nation, they will develop the revenues they need to govern the country. that will be part of it. otherwise, it will not work. >> is there a plan in place for short-term and long-term? is there a plan that we will be contributing $13 billion to this year? what is the plan for four or five years from now?

will we spent $5 billion or $6 billion per year? we are building them an army with a size and scope -- they have never had an army. this is new. is there planning going on that would indicate how this will look bad years down the line in terms of what we have built -- like like four years down the line in terms of what we have built? >> let me get into that. if i am confirmed, i would like to give you a better answer. >> thank you. the wartime contacting commission has done some great work.

it is like many other commissions. it is not getting enough attention. where it needs to be front and center will be under your purview. i hope you make sure your immediate staff is aware of its work and takes it to heart. we have a lot of lessons learned that we have never learned. it is really important as we try to do things with less money. the only other issue i would like to bring up today is getting your commitment and your comments about what needs to be done and should be done as it relates to problems of sexual assault of women in the military. they have had difficulty accessing some sense of justice. >> we talked about that together in your office. i totally share your concerns. we have to have zero tolerance for any kind of sexual assaults in the military. we have to give the victims of

sexual assault the ability to complain and have those complaints listen to and to be able to establish those cases. there are steps that need to be taken. i look forward to working with you and others in the department to make sure we protect women who have served so well in the military these days. >> thank you for your time here today. thank you for loving your country so much that you are willing to take on this important responsibility. thank you, mr. chairman. >> thank you, senator mccaskill. >> mr. chairman, thank you. i think most americans would find it shocking that the department of defense is unable to produce accurate and complete information to support management decisions.

as we also discussed, the law of the land requires the department of defense to be able to complete a clean audit by 2017. i think that would be shocking to most people. i appreciate your response on page 74 of the chances you submitted to our questions. you said achieving audits would be one of your top priorities. you have the capabilities to complete that requirement of law. the marine corps is actually doing relatively good compared to other services in this area. they are experiencing a 3 to 1 return on every dollar they spend. they are getting a good return on that investment. it may be the attitude and the

strong institutional resistance of the department of defense in believing their main job is to fight the nation's wars. we all know the budgetary pressures the department will be under as we deal with the unsustainable debt and these huge deficits. it is important to me an important to you to make financial management reform one of your important priorities. having said that, i would ask you a straight up question. do you agree with secretary gates when he said the defense budget, and no matter how large it may be, it is not because of the country's fiscal woes? >> i agree with that. it is by no means the cause of the huge deficits we are

encouraging. >> the question has requested a $671 billion budget for 2012. there is going to be room for the department to share in some of the budget and cuts that will be on the table. as you and i discussed, i hope this is not seen as an opportunity for those who want to whack the pentagon budget in a way that will impair the ability of us to defend ourselves. i am sure you share that concern. >> yes, sir. >> you have the benefit of great experience. that also means you have a record i want to ask you about. you were president's clinton chief of staff and director of

the omb before that. he played a role in the budgets and oversaw a 4% decline in fiscal year 1994. some have called that a fiscal holiday. others said we were catching a peace dividend. -- cashing a peace dividend. i want to give you an opportunity to explain your role in those cuts and whether you think they were deeper than they should have been. give us the benefit of your perspective. i hope we do not try to cash a peace dividend in 2012 as we are engaged in two and half wars. >> as the director of omb, i was

given the responsibility of the president to try to achieve significant savings as part of the economic plan that was adopted by the congress. we reduced the deficit by almost $500 billion. i think that plus other agreements that were made in the bush administration and with the republican congress all contributed to our ability to achieve a balanced budget. with regard to the defense area, my responsibility as omb director was to provide a number to the defense secretary and allow the defense secretary and those in the defense department to determine how best to achieve those savings. i understand that was part of what they proposed. looking at it in hindsight, it might not have been the best way to achieve those savings. it was a decision that was made at the defense department. >> turning to afghanistan, i

know there is a lot of -- are a lot of favorable comments. you deserve credit for your part in taking down osama bin laden. congratulations to you and the president's national security team for that accomplishment. i get the sense that people were prematurely declaring that the fight is over because we have degraded al qaeda in afghanistan. i am glad to hear you point out that they metastasized to other parts of north africa and the region. i want to ask you in particular -- there are other groups that may not be as familiar to .mericans as al qaeda - could you talk about the islamic jihadist groups that are out

there and could easily more for -- easily morph into a threat as dangerous as al qaeda? >> there are other groups out there. al qaeda is the one we are principally concerned about because they attacked this country. they continue to attack this country. there are interrelationships they have with other groups. there is a group that has relations with al qaeda. they are conducting attacks in afghanistan. there is a group called ttp that has relationships with al qaeda that conducts a tax -- planned attacks against us and they have conducted al qaeda attacked as

well. there is a group that conducts attacks largely in india. they have been known to discuss attacks elsewhere. if you move to the area of yemen, there is a man associated with al qaeda. he is computer oriented and does represent the potential to try to urge others in this country to conduct attacked here. that is a concern. we have somalia, where el shabab operates in somalia. we have intelligence that indicates that they are looking at california -- looking at targets beyond somalia.

if you look at has a lot and hamas -- hezbollah and hamas you will see that there are a lot of groups we have on our plate. >> the threat to american citizens extends beyond al qaeda. thank you for your answer. i look forward to working with you. >> thank you. senator gillibrand. >> thank you, mr. panetta, for your extraordinary service to our country. i want to explore a little more on pakistan and go to a little bit of cyber warfare. chairman mullins stated that it is well known -- chairman mullen stated that it is well

known that pakistan agree to go after the terrorist group. how do you judge pakistan's commitment to that effort? >> i think there is a simple test, which is whether or not they are continuing to go into afghanistan and attacking our forces. if they have an influence over them, they could urge them to cease fire and stop those kinds of attacks. >> i appreciate your testimony earlier about the nature of al qaeda and that it has metastasized. many believe a guy in the arabian peninsula is more dangerous. -- many believe al qaeda in the arabian peninsula is more dangerous. it works in a diffuse way.

the greek terrorist attempts on our homeland since 9/11, one came out of pakistan and one k -- out of -- the >> i support your view that we have to take these threats head on and make them very much a part of our mission. i want to understand why, in yemen, our approach is so much different than afghanistan and perhaps talk about what your long-term strategies are to deal with the fact that al-qaeda has changed so much. >> with regard to specific operations, i would have to do that in another forum. generally, our approach has been that because of these nodes that have developed, our approach has

been to develop operations in each of these areas that will contain al-qaeda and go after them so they have no place to escape, so that we are doing that in yemen. it is obviously a dangerous and uncertain situation, but we continue to work with elements there to try to develop counter- terrorism. same thing is true for somalia and with regards to aqim in north africa, we are working with both the spanish and the french to develop approaches there that will contain them, as well. at the cia, we have tried to develop a more comprehensive strategy to kind of looked at all those nodes, look at all of those threats, and not just focus on pakistan. >> obviously, we do not know

whether the government survives or not, but do we have strategies in place to make sure that if there is a transition, that we are very knowledgeable about what military assets are there, what will happen to them, and you have -- have you engaged the saudis or any other potential allies on what we can do there to protect against future growth of terrorism? >> with regards to specific operations, i really have to discuss that in another forum. as you know, it is a very uncertain situation. it has been destabilized, and yet, we are continuing to work with those individuals in their government to try to go after aqap and we are continuing to receive operation from them. at this point in time, i would have to say that while it is obviously a scary answer --

scary situation, we continue our operations. >> lastly, if i still have time, mr. chairman, i appreciate the testimony about cyber terrorism, cyber attacks, cyber warfare. i appreciate the fact that the statement was made that a cyber attack could be a declaration of war. we had a chance to talk about this in some respect. can you share with us any of your vision, design, goals with regard to how we create a greater platform for a cyber security and cyber defense? in particular, i have worked with senator hatch on creating international protocol to create alliances and working relationships with allies and non-allies on how to begin to have the ability to enforce laws against cyber attacks, a cyber criminals, cyber terrorists and any other form

of cyber miss chief. >> senator, as we discussed in your office, this is an area of great concern for me. i think -- what i have witnessed at the cia and elsewhere is that we are now the target of increasing attacks that go after our systems and it is extremely important for us to everything we can -- to do everything we can to confront that threat. i have great resources at nsa that has tremendous expertise and knowledge in this area. i would like to develop it to be an even more effective force to be able to confront cyber terrorism and i would like to work with you on the effort to try to develop those kind of relationships, not only here but abroad, so that other countries

could work with us in this effort. you know, we talk about nuclear. we talk about conventional warfare. we do not spend enough time talking about the threat of cyber war. >> thank you. last, i want to thank you for your testimony today about your priority to look out for the men and women serving in our armed services and your families. not only must that be one of your primary responsibilities, but i appreciate that is at the forefront of your mind. my time is expired. i hope you continue that focus and particularly focus on the issue of housing. a lot of troops are coming back from various missions and many places around the united states have inadequate housing supply. i hope you can address that in an aggressive way. thank you very much for your testimony. >> thank you. senator collins. >> thank you. thank you, mr. chairman.

director, you certainly deserve the widespread accolades and expressions of gratitude that you are receiving from virtually every member of this committee today. i want to add my own thanks for your willingness to continue to serve our country during such a difficult time, but like my colleagues -- now the hard questions start. i want to start with libya. you have repeated today the administration's goal that colonel gaddafi must go. what then? if there's any painful lesson we have learned from our experience in iraq, is that if we do not have a plan in place after we

have been posed a high rent, that chaos and violence in seuss -- have deposed a tyrant, that chaos and violence ensues. you have a plan for dealing with libya post-gaddafi? do we really know who we are dealing with in the opposition? >> i know that secretary clinton is spending a great deal of her time working with our allies to respond to that concern to try to work with those in the opposition who have come together. to try to work with them, so that if they do have to take control of the country, they will have that capability. what you have raised is a legitimate concern and its an area we have a lot more work to

do in order to ensure that gaddafi does step down, we can ensure that libya will be a stable country. >> it really concerns me particularly when you look at the leadership of al-qaeda and but libyan president -- and the libyan presence there and the number of foreign fighters from iraq. i do not feel we have any confidence that we know what comes next. >> the opposition, obviously, has been made up of various tribal groups that have come together. there are concerns about some of the other influences that are now trying to impact on the opposition. it is something we are watching very closely. stepe can get gaddafi to sto

down, i'm confident that there are enough leaders in the opposition who can provide, hopefully, that continuity. >> let me then turn to afghanistan. no one wants to lose afghanistan. all of us are so mindful of the enormous sacrifices that are military men and women have made in afghanistan and the enormous amount of taxpayer dollars that have been spent. senator brown ask you a question today about what our mission is. you talked about the goal of having afghanistan be a stable state. that is certainly something that i want also. to me, that seems to be a never ending mission. i do not see how we get to a

stable state in afghanistan. let me give you an example. a key to our transition in afghanistan, a key to our troops being able to come home is the development of a confident, aggressive afghan security force. we have made a lot of progress in that area. i look at the cost of maintaining the afghan security force. in this year's presidential budget request, is $12.8 billion. the total afghanistan gross domestic product is about $30 billion and 97% of afghanistan's gdp is derived from spending related to international military and donor

community presence. when i look at that, i do not see how afghanistan is ever going to be able to afford its own security forces. that says, to me, that we are going to have to continue to be a major contributor to paying for those security forces forever virtually. tell me how it ends. i just do not see how it ends. >> i am understand the concerns you have raised, senator, and i think we all share those concerns. i can only say that having served on the rocks -- served on the iraq study group, there was a moment in time i had a lot of and whetherout iraq

it would ever be stable enough to draw down our forces. afghanistan is a very different country with a very different history. the fact is that i have seen progress made with regards to governance in some of the key areas, with regards to security, with regards of the role of the afghans in participating. they have gotten better. whether or not in the end they will be able to develop resources, develop revenue, develop the governance that needs to be done, those are major questions. i think, if we stick with it, if we continue to provide help and assistance to them, i think there is going to be a point where afghanistan can control its own future. we have to operate on that hope. >> finally, let me echo the

concerns my colleagues have raised about whether the budget constraints, which are very real, are going to drive our military requirements rather than vis versa. this year, when the independent panel looked at the qdr, concluded that the qdr had been molded by the budget, rather than what it is supposed to be, which is an unvarnished assessment of what our military requirements are. i am particularly concerned about the gap when i look at the navy shipbuilding budget. the cno has testified before our committee that we need, at a minimum, a 313 ship navy. we know that the 313 ship

goal is much smaller than the actual requirement our commanders have. there was a recent report just two months ago from the navy on the ballistic missile defense force structure requirements. they said the navy currently does not have the capacity to meet the demands of our contended -- of our commanders for capable ships. i'm very worried about that gap in this time of budget constraints. i am worried that the navy has yet to complete the contracts on the tdg 1000, the second and third ships. what actions do you think need to be taken to help close the gap between the 285-ship navy

today and the, at a minimum, 313-ship requirement? >> i strongly believe the navy needs to project our force throughout the world. the navy is obviously crucial to that mission. i agree with the ship numbers that have to be developed for the navy in order to do that. the key will be something that has happened in your own state, which is shipbuilding operations have to develop greater efficiency. yours is a great example of having developed those type of efficiencies that help us on the cost control side and at the same time allows us to continue our shipbuilding capability. i think that a greater competition, a greater presence of an industrial base here that deals with those issues, will provide the type of cost savings that we need. >> thank you. i look forward to working with

you. thank you, mr. chairman. >> thank you, senator collins. >> i do not know if you are going to take a break -- >> yes, it sounds to me like we're going to take a break. this will not be a lunch break. this will be a brief five-minute break. >> great. >> a very quick break, we will finish the question is, and then you have a lunch break.

>> senator blumenthal? >> thank you, mr. chairman. thank you for answering all our questions, for your extraordinary service, and for your very powerful and eloquent testimony today and your very responsive answers to all of the issues that have been raised. i want to second the sentiment that has been expressed by senator gramm, which is, i cannot wait to vote for your confirmation and ippreciate your willingness and patriotism to take on this very tough assignment. and also to second his views, and i think they are widely shared, that we need fundamental and far-reaching reform in our

methods of acquiring and terminating weapons programs. would you agree with that? >> senator blumenthal, i think director panetta wld probably also agreed that secretary gates forot wait for us to gvote director panetta's confirmation. [laughter] >> thank you, mr. chairman. and speaking of secretary gates, i hope and assume you would agree with him that the second engineor the f-35 is unnecessary and should be terminated. >> i support that. >> and that we need to continue the sub building program at the rate of two per year, which is fairly noncontroversial. >> that's correct. >> would you also agree with that theill wmullen

greatest threat to ourecurity today is the national deficit? >> ther's no question in my mind that the size of the threat we are confronting. >> and we need to address that problem without excessive cost cutting in the defense budget. >> obviously, defense needs to play a role. when you are facing that size deficit, everything has got to play a role. >> i want to talk for a moment about one of the causes of those costs in both our defense budget and our veterans programs. they are a cost that is not necessarily in the headlines or even reported. those costs have to do with tobacco use, tobacco addiction,

and the cost of tobacco-related diseases. i know the defense department is very aware of this costs. as a matter of fact, it asked all military pernnel and next year to make their 2011 new year's resolution to quit smoking. in fact, about $1.6 billion per year in department of defense costs are related to medical care that is provided for tobacco-related diseases and among the retirees from our military for veterans, about 80% of the $5 billion in annual cost of treating pulmonary disease are directly attributable to smoking. the cost of smoking simply in dollar terms, medical

treatment, is about at least $5 billion per year, not to mention the impact on readiness, which are, in effect, less fit, less physically able military personnel. more likely to sustain industries. more likely to be stressed out. more likely to be dependent and addicted to nicotine. the stark fact is that military personnel, 50% more likely smoke and use tobacco products than their civilian peers. my question to you is both immediate and a longer reach one. first, do you have any suggestions as to what can be done immediately? second, would you be willing to commit the resources and the interest of the department of defense to addressing the problems of nicotine addiction and tobacco use and the related medical impacts?

>> senator, if i am confirmed, obviously, one of the areas i have to focus on is the health cost. i think the area that you have just to find is one area that we do have to pay attention to in terms of its implications on health and costs. i will look forward to working with you to try to develop an approach that would allow us to , again, deal not only with smoking, but deal with other threats to health care that impact not only our soldiers, but frankly, the impact americans. >> and the families of our soldiers and veterans because of not only the immediate effect of smoking or other kinds of health problems, but also the related

impacts on families. >> that's right. smoking, good nutrition, good exercise, and a number of areas i think need to be focused on as part of the solution to dealing with health care costs. >> i would welcome the opportunity to work with you on those issues. >> thank you. >> let me say, while we're talking about veterans, i have offered a measure and a number other senators have to broaden and deepen the commitment of our country to caring for issues related to employment, homelessness, health care of our veterans and would hope that the department of defense would also increase its commitment in that area and hold under the leadership, it would, given your very moving and powerful remarks about the need to take better care of our military personnel. >> senator, i really do feel an

obligation to those that served. i do not treat this like a situation where once you have completed your service and to become a veteran that somehow you are somebody else's responsibility. i think we have an obligation to make sure people are treated right once they serve this country, not only now, but in the future. >> finally, because my time is close to expiring, one last question. the ammonium nitrate fertilizers that are the cause of probably the vast majority of the ied, very tragic and unfortuna injuries to our troops are transported from pakistan. i wonder what can be done to stop that flow of fertilizer,

the ammonium nitrate substances that are the basis of those explosive devices. >> senator, that is a continuing concern for us. it is not so much the transfer of the material, but it is actually the development of ied's, the explosives themselves, that we see taking place in pakistan that make their way into ghanistan. we have to take a number of steps, not only with the pakistanis, but also trying to check at the border to make sure we do everytng possible to stop the flow. it is a very real threat. a lot of that is coming across the border. >> thank you very much and i look forward to working th you. thank you, once again, for your service to our nation. >> thank you. >> thank you, senator

blumenthal. >> thank you, mr. chairman. it's a pleasure to have you before the committee. we had a chance to speak, leon panetta. i'm delighted to see that a former omb director can make something of himself. you have done a great job as director. i know you've had the opportunity today to answer tough questions, but the tone has been appreciative and respectful. i am most concerned, as you know, on the budget front, particularly with regard to our major programs and the cost of growth, the time delays have been troubling to me on this committee. over the last four or five months, we've heard a lot of testimony. this is at the same time, of course, we are talking about not just restraini spending, but putting everything on the table to deal with our historic deficits, the debt overhang that is affecting our economy so

directly and affecting our future. i also think, for natural -- for national security to our men and women need the best equipment and a need it in a timely matter. the cost overruns annually are over $0 billion per year. this is compared to a decade ago when it was average $40 billion per year. the average delay is almost two years of delivering initial capabilities for these programs. the reasons are varied. sometimes it is internal department of defense process these, i think. sometimes it is the contractor processes. they have been subject to a lot of reports, directives, and public and private studies. the chairman has done some good work on it. we still have a long way to go. this would be one of my major concerns. given your background

experice, you are well qualified to address that. senator gramm cost about -- talked about joint agreements. we heard testimony that we are 80% over costs from the original estimates. and 30% more than the current base line. for 15 years of development and two years of operational production, still do not have a stable design. i think that impacts our war fighters, as well. i realize department of defense is working on implementing the actem's acquisition reform and is ongoing, but frankly, there's a lot more that needs to be done. could you talk more about this and the benefits of competition, as we talk about privately, and

finding efficiencies? >> senator, because we share a common background, i think we understand the costs involved in this area. are dealing with a culture that has developed that we have got to somehow change. i know during the period from 9/11, of thwe have lost a lot of money that has been put into the department of defense, equipment that has been developed during that period. a lot of it has been important to our national defense. a lot of bad habits have developed during that period. there is an assumption that outehow this thing can play a and the cost can increase as dramatically as