Clinton: Debt debate is hurting America’s ability to lead

The recent debt ceiling debacle and Congress’s threat to force a default has hurt America’s standing and credibility as a world leader, Secretary of State Hillary Clinton said today.

Clinton and Defense Secretary Leon Panetta appeared at a joint event this morning at the National Defense University, moderated by the George Washington University’s Frank Sesno. Their discussion focused on the future of the national security budget, but also touched on Afghanistan, Pakistan, Libya, Syria, and the fight inside Washington over America’s fiscal future.

When asked directly about the recent debt debate, Clinton referred to her recent trip to Hong Kong, where she assured world leaders that the United States always eventually deal with its internal challenges — after exhausting all other options. But she said the episode had a negative effect on U.S. international leadership.

"It does cast a pall over our ability to project the kind of security interests that are in America’s interests," she said. "This is not about the Defense Department or the State Department or USAID. This is about the United States of America. And we need to have a responsible conversation about how we are going to prepare ourselves for the future."

She then went on to defend national security spending, particularly as it relates to diplomacy and development, linking it to the U.S. rivalry with China.

"We can’t be abruptly pulling back or pulling out when we know we face some long-term challenges about how we’re going to cope with what the rise of China means," Clinton argued.

Vice President Joe Biden is on his way to China this week and officials previewing the trip said he will  defend the debt deal during his visit there.

Clinton and Panetta’s event seemed designed to project a unified front between the Obama administration’s top foreign policy officials ahead of the looming budget battle, where caps in discretionary spending mandated in the debt deal could result in huge cuts for the State Department and USAID.

"We know we are going to have to put everything on the table. I’m not saying we should be exempt … I’m just saying that as we look at everything that is on the table, we have to try to do a reasonable analysis of what our needs and interests are," Clinton said.

"If you go out to the American public and you say ‘what’s the easiest thing to cut?’ it’s always foreign aid," Clinton said. "We understand that we have a case to make and there is a new way of looking at it."

Panetta expressed general support for a holistic approach toward a national security budget that includes defense, diplomacy, and development. But he didn’t go as far as his predecessor, Robert Gates, in advocating a rebalancing of budget priorities away from the Pentagon and toward the State Department.

"Our national security is our Defense Department and our military power and also our State Department and our diplomatic power," Panetta said. "We all know we are going to have to be able to exercise some fiscal restraint as we go through our budgets…. What I hope this committee doesn’t do is walk away from its responsibility to look at the entire federal budget."

Panetta also repeated the administration’s claim that the debt deal would cut $350 billion from the defense budget, a claim disputed by experts and top lawmakers. Panetta then warned that if the 12-person "supercommittee" fails to strike a deal to cut $1.5 trillion in spending by Thanksgiving, triggering an automatic $600 billion in addition defense cuts, it "would have devastating effects on our national defense."

"It would result in hollowing out the force. It would terribly weaken our ability to respond to the threats in the world. But more importantly, it would break faith with the troops and with their families," Panetta said. "And a volunteer army is absolutely essential to our national defense. Any kind of cut like that would literally undercut our ability to put together the kind of strong national defense we have today."

Regarding the State Department’s budget, Panetta didn’t advocate increases, but he did say it was "absolutely essential to our national security."

Panetta refused to comment on reports that the Pakistani military gave the Chinese military access to a downed U.S. helicopter that was used in the mission to kill Osama bin Laden. He did say that they United States has no choice but to continue to work with Pakistan.

"They have relations with the Haqqanis… there’s a relationship with the LeT [Lashkar-e-Taiba].  And yet, there is no choice but to maintain a relationship with Pakistan. Why? Because we are fighting a war there, we are fighting al Qaeda there, and they do give us some cooperation in that effort," he said.

Clinton referred to the last scene of the movie Charlie Wilson’s War, in which lawmakers decided not to fund civilian programs for Afghanistan after supporting the Afghan military resistance to the Soviet invasion. She said the Pakistanis have a similar view of the United States "that needs to be respected."

"They are partners, but they don’t always see the world the way we see the world, and they don’t always cooperate with us on what we think — and I’ll be very blunt about this — is in their interests.," she said.

Clinton also said it was not important whether the Obama administration actually insists that Syrian President Bashar al-Assad leaves power. There have been several reports that the administration was planning on announcing explicitly that the Syrian leader should leave, but then decided not to at the last minute.

"I’m not a big believer in arbitrary deadlines when you’re dealing with a complicated situation," Clinton said. "It’s not going to be any news if the United States says Assad needs to go… If Turkey says it, if King Abdullah says it, if other people say it, there is no way the Assad regime can ignore it."