Hagel is a decorated Vietnam veteran who told Senate leaders during a confirmation hearing Thursday his experience in combat would shape his policies as secretary of defense.
If confirmed, Hagel would lead a Defense Department facing a series of budget cuts later this year under a so-called sequestration, which would kick in by the end of March.
Hagel said that he'd ensure the U.S. military would retain its leadership position among global military powers, however.
"I want to make sure we continue to do that, as you all do," he said.
NATO Secretary-General Anders Fogh Rasmussen warned this week that allies face tough decisions given fiscal uncertainty. "You can't be safe if you're broke," he said.
Panetta warned that budget cuts were among the top national security threats.
Hagel faced a frustrated Senate leadership. He sparred over Iraq war policy with Sen. John McCain, R-Ariz., a fellow Vietnam veteran and former prisoner of war.