Panetta: Obama needs to engage

Former Defense Secretary Leon Panetta on Monday said President Obama should engage more with congressional Republicans to resolve the government shutdown and debt ceiling crises.

“You have to engage in the process ... you’ve got to roll up your sleeves,” Panetta said at a breakfast hosted by The Wall Street Journal

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Washington faces a Thursday deadline to raise the debt ceiling or risk the nation’s first-ever default. 

Panetta, who served as the president's CIA chief and then Defense secretary, said Obama makes a “fair” point that it would be wrong to allow Congress to use a default on the debt ceiling to gain hostage-taking leverage in budget talks. 

And he said Congress should pass a short-term “clean” bill that reopens the government and raises the $16.7 trillion debt ceiling.

“The problem is, trying to resolve some pieces doesn’t work unless you put it all in one big package,” he said. 

If a budget conference convenes, Obama will have to make “tough” choices on entitlements like Medicare, Social Security and possibly ObamaCare to forge a deficit grand bargain, Panetta said.

“There’s almost a total breakdown in trust among people on the Hill,” he said, adding that "the greatest national security threat we face is our ability to govern."

Panetta, who served as former President Clinton’s chief of staff during the last government shutdown in 1996, said that while both Clinton and Obama are bright and able, Clinton was more engaged.

“They shut down the government but we were negotiating up until the last minute in the Oval Office,” he noted. 

Panetta said having earmarks to encourage rank-and-file members to vote for a deal did make things easier in the 1990s.

“When we passed the Clinton budget I think I sold at least six bridges to get there,” he joked.

But Panetta said that just because talks between Speaker John Boehner (R-Ohio) and Obama on a deficit grand bargain broke down in 2011 is “no reason to walk away” from any further deficit talks.

If Obama is not comfortable personally negotiating, he should empower another Democrat to speak for him, Panetta said. He added that he was hopeful Senate Majority Leader Harry Reid (D-Nev.) could forge a deal with the GOP in the coming days.

Panetta argued that getting a deal on the deficit that involves tax reform and entitlement cuts could unlock legislative progress for the rest of Obama’s term, including on stalked issues like immigration and energy.

“He’s at the point where he really has to look at the legacy,” Panetta said. He said that a deficit deal with Boehner could bring about a new willingness by Republicans to move away from confrontation to governing the country.

The former Pentagon head also criticized the administration for its handling of furloughs.

He criticized the decision to furlough 70 percent of intelligence personnel as not essential. 

“Who the hell came up with that?” he said. 

Panetta also criticized the administration’s handling of death benefits for soldiers killed in combat, which were initially held up by the shutdown, and its decision to furlough 800,000 defense workers only to call half of them back to work later.

“These decisions have been by the seat of the pants, what’s essential and what’s not essential. I think not enough though was put into how exactly this would be implemented,” he said.

“Everybody could have done a better job, especially on this intelligence stuff,” he said.  

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