Panetta, a former members of the House himself, said the charged partisanship that now runs through Congress has eroded the lines of communication between the parties.
"The thing that makes the Congress work is that you'll always have differences … but there are also some lines that are there that make that process work, lines that involve mutual respect, lines that involve, you know, courtesy and a degree of respect for each other, despite whatever their decisions are."
But in light of the recent battles between the Pentagon and Capitol Hill, particularly on the issue of sequestration, "you kind of see [the lines] breaking down in this process," Panetta said, noting that policy fights with Congress have taken on a meaner, more personal edge.
The sharper tone was readily apparent on Wednesday when GOP members on the House Armed Services Committee blamed DOD for putting lawmakers and the Pentagon at odds over how to deal with the $500 billion in automatic cuts under the White House's sequestration plan.
Rep. Rob BishopRob BishopA guide to the committees: House Public lands dispute costs Utah a major trade show House votes to overturn Obama drilling rule MORE (R-Utah) slammed DOD for its refusal to plan for the across-the-board cuts.
"You are part of the problem . . . you helped cause this," Bishop angrily told the DOD and military witnesses.
Officials from the Office of Management and Budget did not direct DOD leaders to start assembling a framework to deal with the fiscal impacts of sequestration until December, just weeks before the cuts had originally been set to begin.
"You had to realize there had to be some lead time" to adequately prepare for the heavy financial impact to the department via sequestration, Bishop said, adding the "silence" from DOD regarding sequestration planning only added to the confusion.
"You bear some of this responsibility [and] there is a lot of blame to go around," Bishop said.
Those kinds of exchanges have come to characterize the difficult dynamic that exists between DOD and Congress, Panetta said.
"It's respect not just for that individual, but respect for the institution of the Congress. And somehow the members both in the House and Senate side have to get back to a point where they really do respect the institution that they're a part of.”
Changing the tone among the new class of lawmakers to one of mutual respect is the only way the Pentagon and the rest of the administration is going to get anything done in Washington.
"Somehow, some way, we have got to get back to that. We have got to get back to that for the sake of this country," Panetta said.