Leon Panetta on top security threats to U.S.

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In this episode of Intelligence Matters, host Michael Morell speaks with former Secretary of Defense and CIA Director Leon Panetta and his former chief of staff Jeremy Bash about a range of national security threats facing the United States. The three reenact a “PDB briefing” of the sort that took place at Langley in then-Director Panetta's office. Morell, Panetta and Bash discuss the way forward in Afghanistan, the type and variety of threats posed by Vladimir Putin's Russia, the prospect of a nuclear Iran, and the long-term challenge posed by China. They also discuss domestic political divisions that could imperil U.S. stability and security. 

Highlights 

  • Afghanistan: “I find it hard to believe that there were not plans on the table to deal with the contingencies that we saw happening because this was not a classified operation. You could basically stand back and see what was happening in Afghanistan. You could see the collapse of the Afghan military. You could see what the Taliban was doing, in gradually moving through that country and establishing control of the country. I mean, it was happening before our eyes. And so somebody, somewhere should have said, ‘If this thing totally collapses, what the hell do we do?'”
  • Russia: “[W]e know Putin. I think we know him pretty well, frankly, from an intelligence point of view. And that he is a bully. And what bullies do when they sense weakness, they become bullies. I think Putin has sensed weakness on the part of the United States going back a ways, and he felt he could take advantage of that weakness, and that's why Crimea fell, and that's why Ukraine is in the situation it's in, and the Russians go charging into Syria and they conduct these cyberattacks against the United States. I think they've really developed their ability to disrupt. And Putin is smart in the way he's doing this.”
  • Iran: “[M]y concern is that if this is just on the nuclear issue, I think Iran is going to play us for chumps. And if they do that, then we could very well have a situation where the United States is going to have to decide whether we are going to have to work with Israel to try to restrain them from developing a nuclear weapon. That's going to be a big decision.” 
  • Domestic divisions: “I would say that today, probably the greatest threat is the dysfunction in our democracy and the inability of both parties to be able to work together to govern … Because if we're going to develop an industrial policy, if we're going to deal with China, we're going to deal with Russia, if we're going to deal with our allies, we've got to show the world that we can govern and that is what worries me the most right now because, I look at our democracy, which has to deal with all these challenges, and I see two parties that are in their trenches throwing grenades at one another as opposed to working together. ” 

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Intelligence Matters: Leon Panetta and Jeremy Bash

Producer: Olivia Gazis 

MICHAEL MORELL: Mr. Secretary, welcome back to intelligence matters.

LEON PANETTA: Great to be with you.

MICHAEL MORELL: You were guest Number #1 on Intelligence Matters four years ago and today you are guest #220. And we've got a couple of million listeners, both as a podcast and as a radio show. So we have grown quite a bit since the last time you were on the show. But thank you for taking the time.

LEON PANETTA: Well, congratulations. It just shows how important what you're doing with this program means to the country and to the world.

MICHAEL MORELL: And welcome, Jeremy.

JEREMY BASH: Great to be here.

MICHAEL MORELL: So, Jeremy – for those that don't know, Jeremy was Secretary Panetta's chief of staff at both the CIA and at the Department of Defense. And today, Jeremy is co-founder and managing director of a Washington, DC consulting firm, Beacon Global Strategies. So, Jeremy, welcome.

JEREMY BASH: Thank you.

MICHAEL MORELL: Thanks for joining us. So guys, what I wanted to do today is something that we don't normally do. Normally I ask the questions and a person answers. I want to take us back to what we did every morning at the Central Intelligence Agency, when ,Mr. Secretary, you were the director. We would join you for your PDB briefing, and, you remember, it lasted an hour. A briefer would come in and tee up the issues and then we would talk about them. We would kick around ideas. You would ask a lot of questions.

The only person or people we're missing are the briefer, and we're missing Fran Moore, who was the head of analysis at the time. She would join us, right? So we are missing a couple of people, but I want to recreate for our listeners what one of those sessions looked like, if that makes sense.

JEREMY BASH: You'd have to get the Secretary his mug that he drink coffee out of every morning that said, “CIA: California Italian-American.” We have that somewhere?

MICHAEL MORELL: We could find one real quick, I'd bet. There's got to be one here. We're taping this at Beacon Global Strategies office, so I'm sure.

LEON PANETTA: I still have that mug. I use it every morning.

MICHAEL MORELL: So let's start with Afghanistan, because basically, I want to talk about it and get it out of the way, because it's actually behind us now. But I think people will want to know what we think about it.

Longest war in American history, and we lost. The Taliban won. And our exit from the country was not orderly, and it cost the lives of 13 American servicemen.

So I'm wondering, as we look back at the war, I'm wondering if you guys think there are things that we could have done differently during those 20 years that would have changed the outcome, would have allowed an Afghan government to have survived our departure. Or whether it was inevitable that whenever we left, the Taliban was going to take over. So that's one question.

And then the second question we can talk about is why was our departure so disorderly, and why does that matter? What signal does it send the world? So let's kick around Afghanistan a little bit.

LEON PANETTA: You know, I don't think it was inevitable. And for me personally, having been Director and also a Secretary of Defense, having been responsible for deploying people into harm's way in Afghanistan and having witnessed the sacrifices that were made, this was kind of a gut-punch in terms of what happened there.
The reason we were there is because of 9/11 and because we made a decision to go after al Qaeda and those who were responsible for planning 9/11.

But we also made a decision that Afghanistan would not be allowed to become a safe haven for al Qaeda that frankly gave al Qaeda the opportunity to plan the 9/11 type attack. And we wanted to make sure that that never happened again. 

And so we actually, for 20 years, managed to prevent another 9/11 attack. And I think we need to think about that, that we in fact did protect our country from a 9/11 attack. And obviously, I was very proud at the CIA of the mission to go after Bin Laden, al Qaeda, and I think we did a lot of things to undermine al Qaeda's leadership. So I feel very good about that.

I do think that there should have been a point, perhaps after the Bin Laden raid, where there should have been greater consideration about, ‘Where the hell do we go now?' And I think we just kind of took it for granted. We kind of continued to do what we were doing. There was always the sense that somehow we were making some progress, so let's just keep doing it. But I really think that was a moment where we should have sat down and really thought, ‘Where are we going? What's our mission? What do we want to achieve?'

I think we built up too much dependence on the part of the Afghan military and the United States, and that the most important thing we should have done is develop greater independence on their part so that it really is their country think that they would care about it rather than just simply relying on the United States. I think there was a better way to do this and frankly, we missed that boat.

MICHAEL MORELL: And the other thing we missed, right, was the deep, deep corruption in Afghanistan. Perhaps there was something we could have done to better get that under control because, at the end of the day, that contributed to the collapse. At the end of the day, it contributed to Afghans welcoming the Taliban's return to power. Jeremy?

JEREMY BASH: Well, I was going to just tee this up for you, Mr. Secretary, which is that when President Biden made his announcement in the spring, the argument he basically made – which I think was pretty sound and I think you also tended to agree with it – was that, given the deal that Donald Trump had struck with the Taliban that we were going to be out of there by March, Joe Biden, effectively was saying, “We're going to decelerate that departure, but we're going to have to leave because if the Taliban is going to attack us, we'd have to plus up our forces.'

So there's no status quo option. There's no just hanging out there with 2,500 troops. ‘We're either going to have to get out or we're going to have to plus up. And I don't want to be the fifth president to increase our force posture in Afghanistan.”

I think you thought at the time that the policy, although it carried some risk, was correct. But I could detect, Secretary, in your voice, when you endorsed the policy that you were worried about the following months; that you foresaw potentially a messy exit.

LEON PANETTA: Yeah, because Jeremy, I guess – once a president's chief of staff, always a president's chief of staff, in the sense that I always think about when a president makes a decision that the key to that decision is the execution of that decision. And if you don't effectively execute that decision, then the decision isn't worth much. That's just the reality.

And I just felt that while, you know, I understood the decision, that something fell apart in the execution. That, whatever the planning process, whatever the contingency process — I mean, as secretary of defense, my God, we plan for every contingency. We spend half of our time trying to figure out what's going to happen if we have to go to war in Taiwan or we have to go to war with China or with Russia, for everything. We planned for everything. That's what we do. You know, it's a planning operation.

And I find it hard to believe that there were not plans on the table to deal with the contingencies that we saw happening because this was not a classified operation. You could basically stand back and see what was happening in Afghanistan. You could see the collapse of the Afghan military. You could see what the Taliban was doing, in gradually moving through that country and establishing control of the country. I mean, it was happening before our eyes. And so somebody, somewhere should have said, ‘If this thing totally collapses, what the hell do we do?'

JEREMY BASH: Just curious, do you both, as former leaders of CIA, believe that CIA and the intelligence community is going to shoulder the responsibility for dealing with the counterterrorism problem in Afghanistan and be our presence there, in effect, because we don't have a diplomatic presence, we don't have a military presence?

MICHAEL MORELL: So we, as a nation, have two issues here. One is the reconstitution of al Qaeda in Afghanistan, right. We have to make sure, as a country, we've got to make sure that doesn't happen.
And then two is ISIS in Afghanistan, which is actually an enemy of the Taliban. Al Qaeda is a friend of the Taliban, but ISIS is an enemy. But ISIS today is a significant threat. So we've got to watch both of those. That takes intelligence. So we've got to figure out how to collect intelligence on those two groups and what their capabilities are and what their plans and intentions are. And then the United States military has to figure out if the president orders them to degrade those two groups. How do they do that, right? So this is the over the horizon thing.
And I think the intelligence piece of the over-the-horizon strategy is going to be hard.

LEON PANETTA: Yeah. Right.

MICHAEL MORELL: Maybe the military piece is a little easier, I don't know. But I think that's our challenge going forward in Afghanistan, and I hope we don't lose focus on it, right, as we focus on other issues that we have to spend time on.

LEON PANETTA: I think we've got to come to the realization that the security problem in Afghanistan has not gone away, that it's gotten worse and that the Taliban in charge of Afghanistan –this is not a Taliban that really has moved into the 21st century.

There was a lot of talk that they would understand, that they would really have to start paying attention to international rules and international relations, et cetera. But I don't see that. I see a Taliban that pretty much has put in place the same kind of operation that they had on 9/11, and that they're going to allow terrorists to be able to have a safe haven, particularly al Qaeda. And then ISIS is going to be able to operate there as well, whether they like it or not.

And so we have a responsibility, particularly because of al Qaeda and what they did, to make sure that we're continuing to follow that problem. And I think we need to have continuing intelligence on that so that we know what's taking place. I mean, the one thing I do see now is that there appears to be, either through the press and through some of the people that are there, a little more awareness of what the hell's going on in Afghanistan. And that's a good thing. We seem to know kind of what what some of the things are the Taliban is up to.
I think we're going to have to have very good intelligence to keep track of just exactly what al Qaeda's doing. And then, you know, I think we've got to have the operational capability to act if they take a step that looks like it threatens our security.

MICHAEL MORELL: I think the good news here is that we've actually figured out how to do this over the last 20 years. And we do it around the world in a number of places on a daily basis. This is just a little harder because we're not in the country. And it's a big country. So being able to get there — I wonder if Pakistan, might, at the end of the day, oddly, be an option for us here.

JEREMY BASH: Yeah, we had to cooperate a lot back when you were both leading CIA with Pakistan. Of course, some of that changed after May 1st, 2011 and the Bin Laden operation. But before that, there was good dialogue, good cooperation, good sharing of information. And we may have to get back there.

And I'd just maybe add one more point to this, which is, Michael, you said we've gotten pretty good at going after people globally. The Find-Fix-Finish approach that both the Special Operations Command and the I=intelligence community have worked together on.

I think one of the things that Joe Biden was exactly right about is that it's not just about Afghanistan. We have to do it in the Sahel. We have to do it in Yemen. We do it in Syria. We have to do it in South Asia. We have to do it in a lot of places. Somalia, absolutely. And so one of the things that I think the intelligence community will be called upon to do is to maintain the focus, the intelligence collection, the analysis and ultimately the options to kinetically strike terrorist targets across a very wide swath of the globe.

MICHAEL MORELL: And I want to say something here because when you came to CIA, Mr. Secretary, as the director, we were just focused on al Qaeda in the AfPak border region. And you said, “Well, what about all these al Qaeda guys in Yemen and all these al Qaeda guys in Somalia and in Africa? Shouldn't we be focusing on them?” And we stood up a big effort to do that, you'll remember.

LEON PANETTA: Yeah. I think, Michael, you're right, that one of the things we really learned to do well was counterterrorism. It took a while, but I really think we became a very effective counterterrorism operation, both at CIA and at Defense, for that matter. And the relationship between intelligence and the military became really, I think, very effective at being able to conduct operations. And we were doing this stuff sometimes seven or eight times a night in Afghanistan or Iraq or elsewhere.

And the fact is, we've used counterterrorism to go after terrorists wherever they were, because terrorism has metastasized, whether it's al-Shabab, whether it's Boko Haram, whether it's different versions of al Qaeda. And we've been able, frankly, to keep a handle on that, and I think we're going to have to continue to do that.
So the issue then becomes, how do we deal with it now in Afghanistan? It hasn't gone away. It's become a little tougher problem. And I think it's got to be counterterrorism. I think we do have to develop our relationship with Pakistan because that's a logical base to try to work from. They, I think, are now worried, having probably encouraged the Taliban to undermine stability in Afghanistan, they now see a situation where the Taliban could very well threaten them.

MICHAEL MORELL: I think the bottom line for me, and I know there's a joke at the working level in the national security community that “over the horizon” means “over the rainbow.” But I'm actually confident that if we focus on this, right, if the intelligence community focuses on collecting intelligence and the military focuses on how do we reach out and touch those groups if we have to, that we'll be able to do this.

LEON PANETTA: Bill McRaven – it was interesting, when we were talking about what was going to happen in Afghanistan and the president, at that point, talked about the over horizon approach, Bill McRaven had this kind of approach that, ‘We can do whatever the hell is necessary and that we have the capability to do it and do it well.' And I trust his judgment.

Now, obviously, it takes some work, but I really do think that we have the ability not only to gather the right intelligence, but to actually go after bad guys if we know that they're up to trouble.

MICHAEL MORELL: So I want to switch topics here. I ultimately want to get to China, but I think there's two near-term issues that I want to talk about first. And maybe we'll take Russia to start.

The Russians are amassing troops along the Ukrainian border. The Ukrainians say there's up to 90,000 Russian troops there. I find it deeply concerning. I'm actually worried about those Russian troops coming across that border. So that's one near-term issue with Russia.

The other near-term issue is so-called Havana Syndrome. These attacks around the world against our intelligence officers and our diplomats. The cause of these attacks are unknown. We can't pin it on Russia at this point. We don't have enough evidence to do that, but everybody thinks it's Russia.

So Russia, all of a sudden is is at the top of the national security list again here. How do we think about deterring the Russians from going into Ukraine, from conducting these attacks? How should we think about dealing with Putin, I guess, is the fundamental question here?

LEON PANETTA: Well, you know, having been an analyst at CIA, and you know this as well, Jeremy, having dealt with the Russians, I mean, I remember there were moments when I was director, I thought there was an opportunity to try to find areas that we could work together with the Russians and we were pursuing that. But I always remember these old timers at CIA basically saying, “Don't waste your time.”

And now I understand them better than ever, because I think Putin – we know Putin. I think we know him pretty well, frankly, from an intelligence point of view. And that he is a bully. And what bullies do when they sense weakness, they become bullies. I think Putin has sensed weakness on the part of the United States going back a ways, and he felt he could take advantage of that weakness, and that's why Crimea fell, and that's why Ukraine is in the situation it's in, and the Russians go charging into Syria and they conduct these cyber attacks against the United States. I think they've really developed their ability to disrupt. And Putin is smart in the way he's doing this.
And so he's now increasing forces in the Ukraine. At the same time, he's continuing to use cyber. He's continuing to, you know – as far as we know – Russia may be behind the so-called Havana Syndrome that's taking place, which is another form of disruption. And bottom line is that the United States and President Biden- and I think he began to do this when he met with Putin initially – is to make very clear to Russia that there are lines that they can't cross. And when he made clear to Putin that we have infrastructure, sensitive infrastructure — and by the way, so do the Russians. And that if they do cyber attacks against us, that we can respond in kind.

I think that's a smart statement to make with Putin so that he understands that there is a price to be paid. And if he doesn't think we're going to act, if he doesn't think we're going to be true to our word, then that makes Russia that much more dangerous.

JEREMY BASH: Yeah, I just think a key here is NATO, because what Putin fears fundamentally is that there's a transatlantic alliance between the United States and 27, 25 other countries on the European continent, in his quote, unquote “near abroad,” as he would call it, that as a military alliance – which, by the way, is a nuclear military alliance, we've got tactical nuclear weapons in Europe to deter Russian aggression – that that military alliance will hang together and that if Russia poses a threat to the European continent, to our interests, that will rally together.

Now, of course, Ukraine is not in NATO. So he feels like he's got some room to push the envelope. But I think we have to figure out ways, through our alliance and through our direct messaging, to say to him that effectively, “We will regard your usurpation of the sovereignty of another country on the European continent as something that Europe and the United States will together defend.” And I think Russia has gotten very good at asymmetric warfare as, Mr. Secretary, you just laid out. I think we've got to increase our capabilities to push back in those domains as well.

MICHAEL MORELL: So the other thing that he fears, right, is his own people coming out into the streets and saying, “We don't like the direction our country's going. We want a greater say in how we're governed. And by the way, we want you to go away.” He's afraid of that. And that's what happened in Kiev, right? That's why he reacted so strongly in the first place to what happened in Ukraine.

And so I think as we think about our policy choices, we need to think about threatening him with sanctions that really would bite the Russian economy, right? The sanctions that have been imposed so far by President Obama and President Trump and President Biden, with one little exception, which I want to come back to, have been sanctioning specific individuals and specific entities. We haven't hit the economy itself. And I think that when President Biden put on his sanctions in April in response to a number of things the Russians had done, he did the entities and he did the people, but he took a shot across the bow. He told American financial institutions that they could not buy Russian sovereign debt. That was designed, beautifully, I think, as a message to Putin that we were willing to kind of go nuclear on the sanctions if he continues to misbehave. So we have to make him think that we will hurt his economy if he does something reckless. I think that's really important.

LEON PANETTA: Yeah. Look, the bottom line is we have to be credible. Credible in terms of what we say we're going to do with Russia. Because I think, you know, there are kind of two or three things that happened over these last number of years that gave Putin a sense that we were not credible. One was the fact that President Trump kept undermining the NATO alliance and kept — I mean, he was doing he was doing Putin's work, to be frank, because his disruption of NATO was exactly what Putin was looking for. Anything that disrupts NATO, anything that weakens NATO is to Putin's advantage. And so that was happening.

Secondly, the United States was not responding when he went into Crimea, when he went into Ukraine, when Russia went into Syria, went into Libya. And even on the cyber stuff, I mean, when they were doing the cyber attacks against the United States, I was always asking myself, “Where is the offensive side of our cyber capability to make clear to the Russians that if they're going to do this to us, we're going to do it to them?”

And so I think Putin got a clear message that he could basically do what what the hell he wants to do. That has got to change now. You're right on how we approach with sanctions. I do think we've got to continue to support the Ukraine to make clear that we are, you know, we are going to give them every capability to try to protect themselves. We need to continue to strengthen NATO so that we're we're sending a clear message that NATO is not going away and that we're willing to use Article Five if necessary, if he decides to move in other places.

I think there's a series of steps that the United States has to take that'll say to Putin, “This is a different game now. You're not going to get a license to do whatever the hell you want.” That's number one. Number two, I think if we do that in a credible way, I actually think you can then sit down and talk with the Russians. I think there is that opening because Putin will say, “Wait a minute, these guys really do mean trouble” and that it is worth talking about nuclear constraints and some of the other things we can do together on terrorism. So I think it really makes sense to have the United States really, really become the world leader that, we'd been since World War II and that we have to get back to being.

MICHAEL MORELL: Mr. Secretary, you talked about the intelligence assessment of Putin – thug, bully. That's absolutely right. I think Bob Gates said, “When you look in his eyes, you see KGB, KGB, KGB,” right? And part of that intelligence assessment of him is the only thing that matters to him is relative power. How much do I have? How much do you have? And so if you can give him the perception that you do have power and you're willing to use it, that changes the dynamic completely.

JEREMY BASH: Yeah, absolutely. I think President Biden set up his Europe engagement earlier this year exactly right, which is, meet with democracies, meet with the European Union, meet with NATO, even with all of the entities that Russia fears. And then at the end, sit down, Putin say, ‘We've got the world rallied behind our model of democratic capitalism, a free market, economies of the liberal international order of human rights. We're watching you. And if you try to impose your model militarily or otherwise on the free world, they're going to be consequences.”

LEON PANETTA: Yeah, I think the thing that Putin may very well test is whether President Biden is words or whether it's action. And they may at some point try to test that, just to determine whether or not the United States really has bite here.

MICHAEL MORELL: He may be doing that right now as we speak on the Ukrainian border. That may be what this is about, right? And the really hard question comes – what if he does go across that border? What does President Biden do? Or what if a third country arrests a team of Russian intelligence operatives with the weapon that is making people sick from this Havana Syndrome? What does President Biden do? Right? That's a really tough question.

JEREMY BASH: Yeah. And that's where I think we've got to be clear-eyed and impose actual costs and consequences, particularly on the Havana Syndrome, because that's no different than, frankly, a terrorist organization blowing up our people. That's a lethal and a sub-lethal weapon directed at our people. And as you guys who had to lead organizations where you send people into harm's way, you know that nothing is more important than force protection.

MICHAEL MORELL: You know, in a way, Jeremy, you just made me think of something. If Russia is behind Havana Syndrome, they are a terrorist state. These are terrorist acts.

LEON PANETTA: Those are acts of war, not just terrorist acts.

MICHAEL MORELL: Absolutely. So let's talk about Iran a little bit because this is not getting enough attention, either. I don't think Russia is getting enough attention in media and I don't think Iran is getting enough attention.
So the Iranians in the past two years – I'm playing the role of briefer here –

LEON PANETTA: Well, you're right at home. (Laughter)

MICHAEL MORELL: The Iranians in the past two years have aggressively pushed their nuclear program forward. They're employing advanced centrifuges to enrich uranium. They're enriching uranium to 60 percent. Power reactors need between three and five, and they're enriching to 60. They are producing uranium metal, which is what you do when you want to make a nuclear weapon. It's at the core of a nuclear weapon. And they're occasionally cutting access to the International Atomic Energy Agency. So they are moving aggressively forward.
I've had experts tell me that they are further along today on their nuclear program than they were when we made the nuclear deal with them in 2015. So they're doing that. They're also being very aggressive in the region against Sunni Arab countries and against the United States. Iranian proxies conducted an attack just two weeks ago against our forces in Syria. They routinely – Iranian proxies in Iraq routinely attack the embassy in Baghdad. Iran itself is fighting Israel in Syria. The Israelis are watching all of this.

Some experts believe that the Israelis are thinking again about taking matters into their own hands with regard to the Iranian nuclear program, possibly thinking about conducting a strike. So Iran, again, is, as it was for us, right in 2011 and 2012, a major issue. So how do we think about this?

LEON PANETTA: I think in many ways Iran is doing what Putin is doing what China is doing, is basically testing the United States. And there, obviously, Iran has a hard line government – become more hardline now – they're doing all of the things you talked about in terms of continuing to enrich their nuclear capability, their nuclear fuel and I really believe they are moving towards the ability to quickly develop a nuclear weapon. And all the pieces are coming together. 

And without question, Israel is going to be very concerned if they feel that Iran can rush to the development of a nuclear weapon. When Israel was concerned about about it when we were in office, there was not much question in our mind that Israel was in fact planning to attack Iran. And we obviously spent a lot of time — President Obama spent a lot of time trying to convince them not to do something on their own. That we, too, would react if they developed a nuclear weapon and that we had a greater capability to be able to do something about it and hold the alliance together. And Israel, to its credit, you know, decided to work with us rather than against us on that.

I think we may face the same issue now, which is that if Israel feels that the United States is not moving fast enough to try to deal with this issue – and again, that comes down to these negotiations and whether or not Iran really does show up and try to negotiate and whether it looks serious because the concern I have is that I'm not seeing a real sense that they're serious about sitting down and trying to return to the former agreement.

If I saw that there was an effort to try to somehow renegotiate that agreement, not just on nuclear, but some of these other areas and that that was where everybody was going to go, I'd feel a lot better about the situation.
But my concern is that if this is just on the nuclear issue, I think Iran is going to play us for chumps. And if they do that, then we could very well have a situation where the United States is going to have to decide whether we are going to have to work with Israel to try to restrain them from developing a nuclear weapon. That's going to be a big decision.

MICHAEL MORELL: I think the politics in both countries suggests that getting to a deal is going to be really hard because if you're President Biden and you cut a deal with the Iranians on the nuclear front, you're going to face the same criticism that President Obama faced right before a midterm election.

And if you're in Iran and you're a hardliner, the argument that another deal with America when they walked away from the first one, right, is a pretty strong argument. So I don't think the politics are good here in either place for getting to a deal.

JEREMY BASH: Yeah, I agree. And think about it: the Iranians are going to probably only settle for a worse deal for us from our perspective, meaning a better deal for them because they're going to say, “Hey, Trump can be re-elected in 2024 and they'll yank out. And so we'll be right back where we were.” So our ambitions have to be calibrated a little bit. I think we have to condition the discussion here and on the Hill to say, “Look, if we get a deal, it's actually not going to be as good as the JCPOA.” Even though everyone is trying to say it should be better and stronger and longer-lasting than the JCPOA – it's not going to be as good.

That's the fundamental decision we're going to make, which is, do we do a deal that's not as good because we hope that the best way to prevent Iran from getting a weapon is some form of diplomacy and trying to keep our eye on it. And what worries me, Michael, is that we've got relatively little visibility into their program. They keep IAEA inspectors out at their will, and we know from other reporting that they're developing their program. And so I think actually Secretary Blinken hit the right note, which is, on a CBS program, Face the Nation, he said last weekend, “We have to keep all options on the table.” He kind of went back to that framework, implying that there could be a military consequence to Iran having a breakout capability.

MICHAEL MORELL: We really have to do the two things the Secretary talked about is, one, we have to convince the Iranians that we are willing to use force if necessary, and we have to convince the Israelis that we're willing to go with them in the right circumstances.

OK. China. Which may, at the end of the day, be the hardest of these. China's now seen by many people as an enemy. It's really hard to find anybody on Capitol Hill who has anything nice to say about China. It's still maybe one of the few issues where Democrats and Republicans actually agree on. So maybe the place to start on China is, how do we see the challenge that China poses to the United States?

LEON PANETTA: This discussion just confirms something I've been saying for a long time, which is there are an awful lot of danger points in the world today that the United States is confronting, any one of which could result in a major conflict of some kind. And that's certainly true with China.

But it also raises the issue that the United States alone – while we're obviously a powerful country militarily and that we have a strong, hopefully a strong diplomatic arm as well – that we're not going to be able to deal with these challenges alone. We have got to build alliances, obviously in dealing with Russia. We've got to strengthen NATO. In dealing with Iran, we have to have our allies with us, both moderate Arabs, Israel as well as European countries.
And when it comes to China, I think we have got to really build up our allies there. Now, the administration has taken some steps to have the Quad, have Australia, India and South Korea and Japan work with us. And that's important. I think, frankly, we ought to be doing more with the ASEAN countries to try to build up their security and work with them and build a stronger alliance with them. Because I think the one thing that China and Russia, for that matter, Iran, the one thing they hate are alliances and our strength is really the ability to pull these alliances together.

MICHAEL MORELL: They don't have alliances. People don't want to be friends with them.

LEON PANETTA: They're autocracies. And so I think China clearly represents a concern for the future. We know what they're doing technologically. We know the investments they're making. We know that they're trying to explore, again, the vacuum that they thought the United States left for them. They're going into marketplaces that we should have been in. They're going into countries with with all of their financing, with their diplomacy and kind of putting a lot of pressure on other countries to abide by China's interests. They are being very aggressive.

And I think they're operating on the basis that the United States might very well not act. And again, I guess it comes back to that message that I thought we had to send Putin. I think it's the same message we have to send Xi, which is that we will. We will, in fact, take action. They need to know that and that there's a better way to try to resolve our differences through negotiation.

MICHAEL MORELL: So one part of this strategy is the allies. The other part of the strategy has to be getting our own house in order, both economically, particularly from a technological perspective, and politically, right, because if we don't, then it really doesn't matter, right? We lose.

And so, you know, at the end of the day, this comes back to us here at home and the kind of mess we're in politically and what that means for getting things done that move our economy and our society forward. How do you think about that, Jeremy?

JEREMY BASH: Well, I think we are on the cusp of a new era of industrial strategy in the United States, meaning we need to have a regulatory approach, we need to have a foreign policy approach, and we need to have a domestic investment approach that matches the moment and the challenge that China presents.

So if you look at what Xi Jinping has said publicly, he's said, “We want to dominate artificial intelligence, quantum, 5G, autonomy, life sciences, space and cyber.” And these are areas where the United States and our allies have to stay aligned on our regulatory approach. Are we going to just break up Big Tech because we don't like the last thing Facebook did? Or are we actually going to keep our major technology companies which invest in those areas strong, capable, globally-deployed to compete with the Huaweis and the Weibos and the TikToks? That's a regulatory approach on national security.

As the Secretary mentioned, I think we have to improve our alliance structure and and build out other new capabilities.

But third, we have to invest here at home in the technology areas that will make us be able to compete globally and we have to get infrastructure passed because if we're strong at home and we have renewal and we have capability at home, then we'll be able to prove our model. And after all, the industrial strategy competition is really about the model of state capitalism, state-controlled capitalism and autocracy, versus free market capitalism. And I think we have to prove the value of our model to deliver for our people.

MICHAEL MORELL: We have to get over this fear of the government working together with industry, right? And actually, if you go back to the beginning of the Cold War, we did. We did. The government and industry worked together to put together all sorts of intelligence and weapons systems that helped win the Cold War.
But Mr. Secretary, I'm going to give you the last word here on American politics, because we got to get that right, too, if we're going to be strong in the world. So how do we do that? How do we get out of this mess we're in politically?

LEON PANETTA: Well, and that really brings us to probably the greatest threat we face. I think it was Mike Mullen, I remember, once said that that the debt is probably one of the big threats to our national security.
And I would say that today, probably the greatest threat is the dysfunction in our democracy and the inability of both parties to be able to work together to govern and to do the things that Jeremy was talking about. Because if if we're going to develop an industrial policy, if we're going to deal with China, we're going to deal with Russia, if we're going to deal with our allies, we've got to show the world that we can govern and that is what worries me the most right now because, I look at our democracy, which has to deal with all these challenges, and I see two parties that are in their trenches throwing grenades at one another as opposed to working together.

And you know, I understand the politics. We've dealt with politics our entire history. But in the end, both parties have been willing to recognize that when it comes to national issues that affect our security, they have to work together.

So the answer to your question in the end, Michael, is leadership and whether or not we're going to lead. I often tell the students at our institute that in a democracy we govern either by leadership or crisis. And I think too often today we're governing by crisis. And somehow we have got to be able to get people who are willing to lead, but more importantly, take the risks that you have to take in order to lead.

Leadership is not about taking care of your base. It's not about being popular. It's not about playing the political game. Leadership is about taking risks in order to be able to protect our country.

MICHAEL MORELL: Secretary Panetta, Jeremy, thank you so much for joining us. This brought back great memories of the favorite hour of my day.

LEON PANETTA: I felt very comfortable with this discussion. We've done it a hundred times before. (Laughter).

MICHAEL MORELL: Thank you both.

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