The Pentagon has come up with a plan to cut $487 billion over the next decade but Panetta told a Senate Budget Committee hearing Tuesday an additional $500 billion in cuts that would go into effect through sequestration is unacceptable.
The Hill said Panetta compared it to "putting a gun to our head."
Senate Budget Committee Chairman Kent Conrad, D-N.D., said balancing the budget would require defense cuts beyond the $487 billion. "We're going to have to have additional savings if we're really going to deal with the debt threat confronting the country," Conrad said.
Panetta said the Defense Department has stepped up to the plate to meet its responsibilities under the Budget Control Act. "But with these record deficits no budget can be balanced on the back of defense spending alone," he said.
The defense secretary said all areas of the federal budget "must be put on the table, not just discretionary, but mandatory spending and revenues."
"We are at a strategic turning point after a decade of war and after substantial growth in defense budgets," Panetta said. "We were driven by strategy, not simply by budget reductions."
He warned that unlike past military drawdowns where threats receded, the United States still faces an array of security challenges in the Middle East, North Africa and North Korea.
"We must meet these challenges, we must meet these threats if we are to protect the American people," he said. "And at the same time, as we try to protect the American people, we have a responsibility to fiscal discipline."
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