SEC. PANETTA: It was a great honor to be in Hawaii on Veterans Day and to lay a wreath at the Punchbowl Cemetery.
It's an important day to recognize the sacrifices that were made by men and women in uniform in the past and at the present time, in particular, for me, as a Vietnam era veteran, to have the chance with Max Cleland to dedicate the new Vietnam Memorial at the Punchbowl.
That was a particular honor for me to be able to participate in that event. So I think all of us on Veterans Day need to pause and be thankful for all of the sacrifices that have been made in order to ensure that we are safe and secure.
We've obviously sacrificed a great deal in the region that we're in, the Pacific region -- the Asia-Pacific region. And the sacrifices that have been made have produced a safer and more secure and more prosperous Asia-Pacific region.
That sacrifice led to some 60 years of stability and allowed our many allies and partners in this region to be able to rise and prosper. Many of them have been able to take millions, literally, out of poverty.
We have a region that I think really is advancing in terms of peace and prosperity and it's extremely important to our security, but it's also important to our economic future as well.
So, looking ahead, obviously we're going to continue to work to invest in the region in order to continue the progress that's been made.
But I want to stress for all of you that the rebalancing to this region is a very important part of the new Defense strategy that we announced and that the effort to rebalance is real.
It's going to be long-term. I mean part of this is long-term strategy and in which we'll continue to work at this. But we've also made some very tangible progress at rebalancing just in this past year.
We've got new deployments, as you know, to Australia, the country we're going to be traveling to, with the deployment of Marines to Darwin. And we're also looking, as you know, at being able to send our littoral combat ships to Singapore.
We have announced that we're looking at a 60/40 split with regards to our Navy ships between the Pacific and Atlantic Oceans. And that will be something that will take effect over these next few years as we head towards 2020.
We've completed the deployment of Ospreys, F-22s to Japan. We are also stressing the improvement and investment in the capabilities of these countries with, you know -- working very closely, obviously, with PACOM.
In Korea, we've strengthened our cooperation on space and cyberspace. Obviously, we continue to strengthen that relationship in a very critical nation that is extremely important to our security for the future.
We're working with the Philippines to develop greater presence and access in the Philippines as well and, again, another country in which we're working to develop their capabilities.
We are working with India to develop increased defense cooperation. My deputy at the Defense Department is working very closely with India to try to advance that progress.
And, as you all know, on the China trip, I think we made good progress in trying to improve our mil-to-mil relationship and to try to develop a strategic dialogue into some very key areas that are extremely important if we really are going to advance peace and prosperity in the region.
But let me emphasize that the rebalance cannot just be about moving more ships or aircraft or troops to the region. And, ultimately, it really has to be whole of government approach.
That means that we have to continue high level engagements with the secretary of state, obviously, the chairman of the joint chiefs of staff, myself, (inaudible). The president is going to be coming to this region next week as well.
We need to continue diplomatic, economic and development assistance and engagement as well and we need resourcing to ensure that this commitment is sustainable for the future.
Our hope is to obviously continue to make new partners in this region, to be able to work with these countries to develop their capabilities as well as developing opportunities for a rotational presence.
We want to deepen and modernize our existing partnerships and alliances and we want to build regional institutions, particularly working with ASEAN.
Going the last part -- the latter part of this trip is to go to Cambodia and the purpose there is to meet with my ASEAN defense ministers because we really believe that we have an opportunity to develop that organization to a very effective operation that can bring countries together to deal with some of the challenges in the region.
There's a real opportunity here to make that work. So these are new frontiers, areas of cooperation. It's going to take a lot of work. It's going to take a lot of focus.
But we are --as I've said time and time again, we're a Pacific nation. We're a Pacific power. We're going to remain a Pacific power, but our fundamental goal here is to work with other countries to advance the peace and prosperity in that region.
Q: Mr. Secretary, now that the election is over and the president is putting together a second term national security team, people are wondering about your future?
A, Can you say whether you would have any intention of staying for the full four years of the second term? And, B, have you had discussions with the president, either before the election or after, about the timing of your departure?
SEC. PANETTA: You know it's no secret that, at some point, I'd like to get back to California. It's my home and we have our institute.
But there are a lot of challenges right now with regards to defense issues in Washington, sequestration, budget issues, issues related to planning on Afghanistan and I think the president and I are working very closely to make sure that we meet those defense challenges.
So, right now, my goal is to basically meet my responsibilities in terms of dealing with those issues and that's the most important focus I have right now.
Q: You don't intend to stay for four years, then?
SEC. PANETTA: Who the hell knows?
Q: It's like my experience in Washington is you better do this day to day.
Q: On the resignation of the CIA director, can you tell us do you feel that was the right step that he took given what happened?
And, second of all, as the former director, are you concerned about the agency's morale, the agency's workforce and the agency's effectiveness given this episode?
SEC. PANETTA: Yes. You know, first, obviously, it was a very sad situation, to have a distinguished career like that end in this manner. And I -- you know my heart, obviously, goes out to him and to his family.
But I think he took the right step and I think it's important when you're director of the CIA with all of the challenges that face you in that position that -- you know that personal integrity comes first and foremost.
With regards to the future, you know I -- having served there the first two years of this administration, I think it's really important to continue to have the CIA stay on track doing the job that is absolutely essential to our national security.
They have a very important mission focused on intelligence and intelligence operations and I think it's very important because some strong and capable and dedicated to be able to continue that effort.
This is a critical time to make sure that with all the threats that we're dealing with in the world, that we maintain a strong intelligence operation.
Q: Going back to Benghazi, (inaudible)
STAFF: Can everyone hear the question?
SEC. PANETTA: You know one of the things that we are doing right now is we are involved in an assessment between DOD and the State Department to look at the embassies in that region and what additional steps need to be taken in order to ensure the security of our embassies.
So, you know, we do need to look at how we can A. improve the security and 2. be able to effectively respond if there are any threats.
With regards to Benghazi itself, I think it's been pointed out we moved very quickly to deploy the forces that we thought were important to deal with the threats in the region.
We deployed those forces as quickly as we could, but the problem with Benghazi itself was that the events there were happening on a rapid pace and that attack was largely over by the time we could respond.
SEC. PANETTA: The fact is we had them deployed to the key areas that we needed to have them move from and, you know -- we have so many bases in the area, obviously, Sigonella, one of those bases, but Rota as well as other bases in the region.
The fundamental fact is this -- that in order for us to be able to move quickly, we have to have some advanced notice that something is going to happen and, in this case, we didn't have that.
When we were informed, the attack was already happening. And to be able to, you know -- to respond quickly while an attack was going on just made it very difficult to be able to move as quickly as we would have wanted.
Q: On Afghanistan, could you please bring us up to date about where General Allen recommendations are? Could you give an orientation about what kind of residual force you're looking at?
In the debates, President Obama indicated that 10,000 would have been too much to keep behind in Iraq. Has any kind of similar calculus been made for Afghanistan about what would be too much to keep there?
SEC. PANETTA: General Allen has worked on several options that we are now reviewing and working with the White House on. And my hope is that we'll be able to complete this process within the next few weeks.
And I think -- I'm confident that we're going to be able to get to the right number that we're going to need for the post 2014 enduring presence.
Q: (Inaudible) What are those options and how are they broken out? I know we can get those numbers, but can you explain what that means?
SEC. PANETTA: Well, you know, what he's presenting is, you know, several options based on the missions that we have to address in the Enduring Presence period, missions like counterterrorism, training, advise and assist the Afghan army and, you know, the ability to provide enabling capability.
All of those are being carefully reviewed and how you respond to each of those missions -- I mean there is some variation here, but in order to determine how best to accomplish those missions.
And so what he's presenting is kind of a, you know, what are some of the variations in order to able to address those missions. So we're going to have look at that and try to determine, you know, what's the best course in order to have an effective enduring presence for us in the post 2014 period.
Q: You have warned about sequestration. And now that the elections are over and there's been some talk about, you know, how Congress is likely to address the larger question of deficit and debt, do you have a clearer idea of how sequestration will be resolved or is it likely to be kicked down the road? Do you have any idea what the contours of how the solution might look like?
SEC. PANETTA: Well, as you know, there's been a lot of discussion on this within the last few days and there are obviously some hopeful talk of trying to find a compromise on this issue.
I really do think that coming out of the election, this is real opportunity for both the Republicans and the Democrats to address the fundamental challenge that faces this country with regards to our deficits.
And, you know, as you know from my own history dealing with budget deficits, in order to do it on a fair and effective basis, you have to look at the key areas of the federal budget.
The fact is that, you know, we have addressed the discretionary area, we’ve taken almost a trillion dollars out of discretionary area and out of defense alone, almost a half a trillion dollars just out of defense.
I think the responsibility now, both Republicans and Democrats, has to be to look at the entitlement area, what savings can be achieved on entitlements and what additional revenues need to be on the table as well.
Every budget agreement that I've been a part of has involved entitlement savings, it's involved revenues and it's involved discretionary caps.
And I think those are all the pieces that have to be discussed and put together in ultimately a budget agreement that can not only avoid sequestration, but that can avoid the other problems that we're going to confront on a fiscal cliff.
Q: A quick follow-up on that, sir. Even if sequestration were avoided, what are the chances that defense will be asked to pay more than the $487 billion that's already been taken out?
SEC. PANETTA: Well, you know, we've -- we have already made a significant contribution to deficit reduction. You take $500 trillion or $500 billion or half a trillion dollars out of the defense budget.
You know we've been able to do that in a responsible way that's tied to a defense strategy that’s going to take us, you know, into 2020 and beyond, over the next 10 years.
So we've done it in a responsible way. We’ve responded. The challenge now for Democrats and Republicans in the Congress is to look at these other areas that have to be part of a budget agreement.
And those are largely entitlements, which represent almost two-thirds of the federal budget and revenues. Those are the areas that have been addressed.
And, frankly, before they look to any more money from discretionary, I want to see some progress with regards to both entitlements as well as on revenues.
You know, look, the other danger here, because these are tough decisions and we're dealing with a lame duck Congress in which, you know, the time is constricted here. So this is going to be a real challenge for members to be able to address some of these bigger issues.
But the worst thing that could happen is for them simply to kick the can down the road and just delay the whole process without addressing the fundamental issues that need to be addressed.
If they just kick the can down the road, it'll just continue to represent a cloud over the Defense Department and that's the last damn thing I need right now is to have more uncertainty.
Q: You would not rule out any more cuts for defense? Would you rule out any more cuts from defense?
SEC. PANETTA: My view right now is that we have, you know -- we have done our part with regards to deficit reduction. And I sure don't intend to put anything additional on the table.
But, you know, I think we've got to see what progress they make with regards to the larger portions of the budget that they've ignored in terms of dealing with the deficit crisis.
Q: Mr. Secretary, this is the third trip you've made to Asia since June and the president's coming, Secretary Clinton's here. As you pointed out, the administration wants to ensure the continued stability and prosperity in Asia.
How do you do that without shirking American leadership in the Middle East, which is a place that's not stable. It’s in the throes of a lot of historic change, Syria's a mess, things with Iran are dicey, you have the Arab Spring.
I mean why is the administration focusing so much in Asia? Is that coming at the expense of its leadership in the Middle East?
SEC. PANETTA: Look, the United States is the strongest military power in the world and we remain the strongest military power in the world.
And that means that we can walk and chew gum at the same time, which means that we have to cover the threats that exist in the world, not just in the Asia-Pacific region, but throughout the world. And that's what we're doing.
Even as we are rebalancing our effort to the Pacific, we still are maintaining a very significant force in the Middle East to try and deal with contingencies there.
We are still meeting our responsibilities with regards to other allies and partners in the world. If -- the plan we put in place -- the defense plan we put in place recognizes that we can do this rebalance and meet our responsibilities elsewhere as well.
That's why it's very important that, on the defense budget, in order to meet these responsibilities, we have some degree of certainty as to what the defense budget is going to look like not just now, but in the next five years in order to maintain our responsibilities.
But I -- you know -- I feel very comfortable right now with regards to, you know, how we're dealing with the threats in the Middle East, the presence we have there.
It does mean that we have to continue to be able to deploy our ships in a way that gives us some degree of flexibility, doesn't put too much pressure on, you know, the men and women in uniform in terms of these deployments.
We've got to take that into consideration as well. But I'm very confident that our military leaders are doing this in a very responsible way and I think the United States of America is big enough to be able to handle those kinds of threats.
STAFF: One more.
Q: Mr. Secretary, back to Petraeus, is there any indication that this affair started while he was on active duty? Do you think there's any chance there could be prosecution involved? Would that be your call?
SEC. PANETTA: You know, I don't know. I don't know the answer to that. I guess I'm reading the papers like you are to determine just what the committee finds out, what the ultimate investigation determines on that issue.
We, you know -- we obviously are going to watch this closely to determine just exactly, you know, when that took place. But I think, right now, my view is let's see what the investigation turns up and what the Congress, these committees, are able to determine as to what exactly took place.
Q: (Inaudible) do you think that Capitol Hill should have been briefed earlier?
SEC. PANETTA: You know that's another issue I think we ought to look at because, you know, as a former director of the CIA and having worked very closely the intelligence committees, you know, I believe that there is a responsibility to make sure that the intelligence committees are informed of issues that could effect, you know, the security of those intelligence operations.
STAFF: All right, thank you, everyone.
SEC. PANETTA: Thanks, guys. Thirteen hours. How many hours we got left? All right.
STAFF: Too many. (Laughter.)
SEC. PANETTA: That's right, what, we drink, we eat, we got to sleep and then we do it all over again. (Laughter.)