When asked whether Panetta had delivered a recommendation to draw down troops in Iraq to 3,000, White House spokesman Jay Carney responded with a blunt "no."
"We want a normal, productive, healthy relationship with Iraq," he said. "If the Iraqi government makes a request of us, we will certainly consider it."
For now, Carney said, the U.S. and Iraq are continuing to move forward "under existing agreements."
"The President has made abundantly clear for a long time now...that we will end our efforts in Iraq -- our combat efforts -- responsibly," he continued.
When pressed about whether budgetary pressures are contributing to decisions regarding troop levels in Iraq and Afghanistan, Carney said only: "We live in a world where resources aren't infinite."
Republicans critical of slashing troops in Iraq and Afghanistan quickly seized on the report, arguing that such a severe troop reduction would only benefit Iran's goals and jeopardize recent successes in stabilizing the country.
"If accurate, that decision would be very far away from the commanders' recommendation," Sen. Lindsey Graham (R-SC) said in a statement. "Reducing our troop presence down to 3,000 would put at risk all the United States has fought for in Iraq."
"The biggest winner of a US decision to move to 3K troops in Iraq would the Iranian regime. The ayatollahs would rejoice," he continued.
Graham subsequently joined Sens. John McCain (R-Ariz.) and Sen. Joe Lieberman (I-CT) in a joint statement expressing deep concern about the reports of plans to sharply reduce troops in Iraq.
"This is dramatically lower than what our military leaders have consistently told us over the course of repeated visits to Iraq that they require, and that is needed to support Iraq in safeguarding the hard-won gains that our two nations have achieved at such great cost," they said. "In particular, we are very concerned by the prospect that a follow-on force might lack the capabilities and authorities necessary to help Iraqis ensure stability across the disputed territories in northern Iraq, which we consider an essential mission."
The senators urged the Obama administration to work "urgently" with Iraqi authorities to reach an agreement that "reflects the best military advice of U.S. commanders on the ground and allows the U.S. to safeguard our national interest in Iraq's stability."