Barring some surprise unlikely for a Washington insider who has faced Senate confirmation more than once before, Leon Panetta will become the 23rd U.S. secretary of defense. On a good day, the job is nearly impossible, says Johns Hopkins University scholar Charles A. Stevenson. Only half of those serving as SecDef last more than 18 months, he points out in his authoritative book about the post. Eight have been fired or allowed to resign. One committed suicide shortly after leaving.

Most of the roles Panetta has now as head of the CIA—manager of a vast global organization, synthesizer of staggering amounts of information, key adviser to the president—are also required of the defense secretary. Add to that jobs as war planner, technocrat and diplomat. In addition, the defense secretary is much more visible, serving an advocate and explainer on Capitol Hill, abroad and in the news media.

On top of all that, Panetta has a very tough act to follow. Robert M. Gates departs as a firm, respected and forthright leader. With a predecessor at the Pentagon who was prickly to pugnacious, Gates was welcomed as a breath of fresh air both within and outside “the building.” What is more, Gates, a former CIA chief himself, had the advantage of being the first SecDef to serve both Republican and Democratic presidents, making him as close to politically bullet-proof as a Cabinet officer ever gets. He was an effective day-to-day decision-maker and held top military and civilian officials accountable to a remarkable degree. And on the broad issues, he did much to force the military-industrial complex—and his nation—to face up to the implications of 21st-century realities.

Gates has been on the right track in challenging the defense industry to deliver weapon systems on time and on budget—the Defense Department's contribution to cost overruns notwithstanding. For too long, contractors largely have been given a pass on program performance for the most advanced weapons systems, as long as the end products met the requirements and the technology kept the U.S. ahead of potential adversaries.

Last week's successful raid on Osama bin Laden's lair in Pakistan is dramatic affirmation of Gates's wisdom in emphasizing special forces, current threats and getting new technologies into the field rapidly. Looking at the wreckage of a modified Black Hawk used to sneak into Abbottabad, one can not help but be reminded of Comanche, the Army's stealth-helicopter effort whose massive cost and long schedule slips eventually led to cancellation. It sure looks like that Black Hawk was stealthy enough, and at a tiny fraction of the cost (see p. 22). But it had another, huge advantage: It was actually available for deployment.

The raid also highlighted the importance of the timely gathering and dissemination of vital, actionable intelligence information in support of the warfighter. Panetta will bring that understanding to the Pentagon. For his part, his likely successor at CIA, Army Gen. David Petraeus, has operational experience that will allow him to direct the CIA's activities globally in a way that perfectly aligns intelligence-gathering and analysis with the most pressing and immediate national security objectives. The Defense Department's mandate to do more with less means reliable strategic—and tactical—intelligence will be all the more important going forward. Panetta and Petraeus are well positioned to make sure that it is.

But if it was Gates who teed up the ball on the new realities, it is Panetta who will have to drive it down the fairway. That job is made all the more difficult because defense spending must come down. We do not reach that conclusion lightly. Sure, the U.S. could maintain its trinity of economic beliefs—taxes must never be increased, defense spending is off limits and social entitlement programs are untouchable. But if it does adhere to those principles and actually seeks to stanch the gusher of red ink in its annual budgets, the U.S. government will become, as some wags have suggested, merely an insurance company with an army. “Discretionary” spending would have to go to zero. No national parks, no medical research, no FAA, no NASA—at least none supported by federal spending.

So Panetta's experiences in Congress—where he chaired the House Budget Committee—and as White House chief of staff and budget director will be at least as important as his time at the CIA. But the tasks ahead are far bigger than any one person. Congress can do its part by ending its year-to-year funding approach to major procurement programs that scuttles meaningful planning and efficiency in weapons development. The executive branch may need a sweeping reorganization of its national security apparatus akin to the Goldwater-Nichols law. And industry must look for ways to end its addiction to 20-year development cycles, and instead foster reasonable investments in a greater variety of approaches and technologies. The tasks ahead are daunting. The cost of failure is incalculable.