Speaking at a conference Monday of the Association of Defense Communities, Panetta said potential cuts to defense spending would "hollow out the military," the Department of Defense said in a statement.
Military spending will be cut across the board by $500 billion over the next decade under a "sequestration" policy if Congress cannot pass a debt reduction plan.
Panetta said if sequestration becomes reality, "it'll be a disaster for national defense and it would be a disaster, frankly, for defense communities as well."
The department plans to deal with the budget crisis by becoming a "smaller, ... leaner and more agile force," he said
The military will refocus on its strategies in the Asia-Pacific region, the secretary said, and become vigilant against threats from cyberspace, he said. In addition, the department's strategies must include protecting and investing in its industrial base.
Duggar sisters unveil Christian dating rules in new book
McPhee, Cokas 'working on their marriage' after affair