Congress in a New Year's Day vote postponed a series of automatic budget cuts known as sequestration until the end of March. The deal delayed more than $54 billion in military spending.
Panetta said lawmakers avoided the worst possible outcome, though a cloud hangs over defense spending cuts.
"The responsibility now is to eliminate it as a threat by enacting balanced deficit reduction," he said in a statement. "Congress cannot continue to just kick the can down the road."
Panetta said policymakers in Washington have an obligation to Defense Department personnel stationed overseas to prevent deep budget cuts.
"We need to have the resources to effectively execute our strategy, defend the nation, and meet our commitments to troops and their families after more than a decade of war," he said.
Pentagon reporting site Military.com, meanwhile, notes that U.S. Marine Gen. John Allen, the allied commander in Afghanistan, submitted recommendations to Panetta for bringing an end to the conflict there.
"The first thing is to establish how many (troops) stay in Afghanistan," the spokesman said.