Panetta Selected by Obama to Head Pentagon as Petraeus Is Chosen for CIA

President Barack Obama has chosen CIA Director Leon Panetta to take over the Pentagon from Defense Secretary Robert Gates and will nominate General David Petraeus to lead the spy agency, an administration official said.

Obama also plans to name veteran diplomat Ryan Crocker as the next U.S. ambassador to Afghanistan and Lieutenant General John Allen to replace Petraeus as commander of U.S. and allied forces there, the official said, briefing reporters on condition of anonymity.

The president will announce the nominations tomorrow, the official said. Obama is reshaping his security team as the U.S. undergoes a transition in Afghanistan, with the withdrawal of an unspecified number of troops beginning in July, and as it winds down operations in Iraq.

“This decision says to me we are ‘steady as you go,’” Bruce Riedel, a senior fellow at the Brookings Institution in Washington, said in an interview.

The president’s choices are likely to get bipartisan support in the Senate during the confirmation process. Republican Senator Lindsey Graham of South Carolina, a member of the Armed Service Committee, said in a statement that all four are “experienced people with unique capabilities,” and that he “could not be more pleased with these selections.”

Gates Departing

Gates, who previously announced his intention to leave his post this year, will depart June 30, and Panetta would take over July 1, pending Senate confirmation, according to the official. The nomination of Petraeus would be submitted during the summer with the expectation that he would take over at the Central Intelligence Agency by the beginning of September, the official said.

That would leave Petraeus, who would retire from the military to take the CIA post, in a position to help manage the transition in Afghanistan. He is the architect of U.S. counterinsurgency strategy and oversaw an escalation of American troops in Iraq.

The timing for Crocker’s nomination hasn’t been set, the official said. Crocker, 61, served as ambassador in Iraq from 2007 to 2009 and was the top U.S. diplomat in Pakistan before that. He currently is dean of the Bush School of Government and Public Service at Texas A&M University.

Central Command

Allen is the deputy commander of the U.S. Central Command, based in Florida. Allen filled in as acting commander last year when Obama moved Petraeus from head of Central Command to take charge of the war in Afghanistan.

Allen will serve as special assistant to Admiral Mike Mullen, the chairman of the Joint Chiefs of Staff, in the interim to prepare for assuming the post in Afghanistan on Sept. 1, the official said.

Panetta, 72, was named director of the CIA in February 2009. He previously served under President Bill Clinton as budget director and as White House chief of staff for three years. He also was a U.S. representative from California from 1977 to 1993, and during part of that tenure served as chairman of the House Budget Committee.

Panetta’s challenge will be to convince the public that the Pentagon can reduce the defense budget while maintaining security, said Steve Clemons, an analyst with the New America Foundation, a nonpartisan policy research organization in Washington.

“Panetta has credibility with the harder-edge military guys, but they have also committed to themselves to the $400 billion in cuts,” Clemons said.

Budget Concerns

In January, Gates proposed $78 billion in reductions in the Pentagon’s budget over five years, which equals about 2.7 percent of a $2.91 trillion spending plan through 2016.

Obama announced earlier this month that he wanted to cut deeper, with the goal of trimming $400 billion in security spending over 12 years, as part of $4 trillion in cumulative deficit reduction. Administration officials haven’t specified if the Pentagon would bear all of the $400 billion in cuts, or whether other security agencies, like the Department of Homeland Security, would be affected.

The defense budget is of crucial interest to investors. Panetta presence likely will have a calming influence, according to Byron Callan, a defense analyst and director of Washington- based Capital Alpha Partners LLC.

Smooth Transition

“It is not the risk that investors feared,” Callan said in an e-mail. “Panetta has extensive national security experience, he’s managed large organizations and he can work with Congress. This passing of batons should go smoothly.”

At the CIA, Panetta has been a proponent of increasing the frequency of drone strikes in Pakistan. Improved intelligence has enhanced the imagery gathered by unmanned Predators flying 24-hour patrols over the region near the Afghanistan border, making the missile-firing drones more precise, a U.S. official said in January.

Riedel said the nominations signal there won’t be any upheaval in the U.S. approach to Afghanistan and Pakistan.

“These are the people who helped formulate strategy in the first place,” said Riedel, a former CIA and National Security Council official who helped develop the Obama White House’s first Afghan strategy in early 2009. “I don’t see them as breaking with it.”

Pakistan

Panetta and Petraeus both “have a pretty deep skepticism about Pakistan’s commitment” to press the offensive against Taliban based in the nation’s ungoverned northwest region and alliances with anti-U.S. militants, he said.

Obama plans to begin withdrawing U.S. forces from Afghanistan in July, a deadline that could create tension with Petraeus.

“Petraeus is going to be a logger heads with the White House from day one,” said Loren Thompson, a defense analyst at the Lexington Institute, in Arlington, Virginia. “I see a big flashing national story six months from now where he resigns in a huff because of the administration’s drawdown in Afghanistan.”

To contact the reporters on this story: Hans Nichols in Washington at hnichols2@bloomberg.net; Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.