Pentagon insiders seen as most likely successors for Panetta at DOD

Speculation over who will replace Defense Secretary Leon Panetta has reached a fevered pitch following President Obama's reelection Tuesday.

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After serving a full four years in the Obama administration, Panetta is expected to depart early into Obama's second term in the spring or summer of 2013, defense sources say.

But before he heads back to his home in sunny Monterey, Calif., Panetta will likely help the administration through its difficult sequestration fight and usher in the 2014 defense budget that’s currently stuck in limbo over the automatic cuts.

Obama’s victory triggered an immediate wave of rumors about the potential successors for Panetta, with two names — Deputy Defense Secretary Ash Carter and former Under Secretary for Policy Michèle Flournoy — rising to the top of the list. Both Carter and Flournoy were considered leading candidates well before Obama was reelected.

Still, it’s presumed Panetta will remain in the Cabinet for a little while after Obama’s second inauguration, industry sources say, in part because of the big defense battle in Washington that still needs to be resolved, sequestration.

Panetta’s spokesman George Little would not speculate about Panetta’s plans during a Pentagon press briefing Thursday. He lamented the “Washington parlor games” surrounding the defense secretary’s future.

“There's always a temptation shortly after an election to engage in what I call ‘Washington parlor games’ and to speculate about personnel changes that may or may not occur in the future,” Little told reporters.

“Secretary Panetta is focused squarely on his job today. He's focused on the missions of the Department of Defense, and he's not focused on his personal future.”

While other top Cabinet officials have made their plans more clear, such as secretary of State Hillary Clinton, who has long said she’s not returning for a second term, Panetta has been quieter about his future.

The 74-year-old secretary has served Obama for four years, first as CIA director and then as the successor to Robert Gates in the Pentagon.

Defense analysts say that Panetta is likely to leave early into Obama’s second term — potentially as soon as March 2013 — but that he remains an important player in the fiscal cliff deliberations that will dominate Washington in the coming months.

Republican hawks have appreciated Panetta’s strong words about the damaging effect sequestration would have on the military, even as he’s chided Congress for not acting to stop the cuts. 

Analysts say Panetta is seen as someone who can cut past the politics on the sequester as the administration negotiates with Republicans on Capitol Hill.

Panetta is also expected to present the 2014 defense budget, which at the moment does not take into account the across-the-board sequestration cuts that would take effect Jan. 2.

The 2014 budget is the second that will reflect the Pentagon’s plans to cut $487 billion over the next decade, as well as the new defense strategy that pivots to the Pacific.

When Panetta does leave the Cabinet, Carter and Flournoy will be next in line to replace him, analysts say.

Flournoy, 51, was the Pentagon’s No. 3 as under secretary of defense for policy from 2009 until February 2012. She left the department to spend more time with her family, but she’s stayed involved as a surrogate on national security and foreign policy for Obama’s reelection campaign.

Her selection would also be historic for Obama, as she would be the first female defense secretary.

Flournoy, who co-founded the Center for a New American Security think tank in 2007, told The Hill in October that she was happy taking a break from public service. She declined to speculate about any potential future in the Obama administration.

But she also added that she was not yet done with public service.

The other leading candidate is Carter, the current No. 2 official at the Pentagon. 

Carter was nominated by the White House to replace outgoing deputy defense chief Bill Lynn last August. Prior to his nomination, Carter headed up the Pentagon's powerful programs and acquisitions directorate, responsible for procuring and managing the department's multibillion-dollar weapons arsenal. 

The former Harvard professor and head of DOD's international affairs bureau in the Clinton White House, Carter served as the Pentagon's weapons chief for three years. 

Carter also played a large role in then-Defense Secretary Gates's so-called "efficiencies initiative," which scaled back and terminated outright a number of top-dollar weapons programs across the services. 

However, recent history might not be on Carter’s side to succeed Panetta.

Since former Defense Secretary Donald Rumsfeld's departure in 2006, no deputy defense chief has assumed the top spot. Each time, the White House has opted to go outside the Pentagon’s chain of command to pick a new secretary. 

Gates was the President of Texas A&M when he was picked by the Bush White House to replace Rumsfeld. Panetta was serving as CIA director when he got the call from the Obama administration in 2011 to replace Gates. 

As far as outside shots to succeed Panetta, there’s been speculation that former Sen. Chuck Hagel (R-Neb.), Sen. Jack Reed (D-R.I.) and former Navy Secretary Richard Danzig could all get a look. 

David Petraeus, the former general who succeeded Panetta as CIA director, is also occasionally mentioned, though most say that is an unlikely move.