From an observer up on the Hill ...
No one asked the Hill. Came as a suprise to HPSCI and SSCI members. Feinstein and Rockefeller wanted Steve Kappes. Members like and respect Panetta, but they want an IC professional in the post. They remember what Goss did, and fear that CIA's role will continue to diminish with a political in charge (fair or not). Some even like Panetta for Commerce, which is reportedly what he wanted originally. It's awkward.
And from a career intel professional ...
I have 29 years of experience in the intel business both in government and as a consultant / contractor to the government. I recently retired after those 29 years as a Navy Captain (Intel). I have served with many in the "national intel community" and served on the WMD commission in 2004-05. This is my cred, now for my comment.
I think there is a lot more here than is being said. I believe that Feinstein did not want someone like Panetta who has a large and independent power base and network. If you get a career guy they are a lot easier to isolate and move around. Panetta has been around for a long time and has his own network. I actually think that it is a good choice. He knows how intelligence needs to be presented to the President - that is the critical issue here.
I do not discount the notion that many in the CIA feel slighted by the creation of the DNI and not being the "premier" agency anymore, at least when one looks at the totem pole. But if you look at the PDB more than 80% of the product still originates from the DI. It is the gold standard of intelligence agencies, both here and abroad. As a old colleague once said to me: there are a lot of jewels in the crown of the United States government but there are only a few large critical ones: CIA DI, NASA, NIH, State; that is where the intellectual might of the government is.
The issue is not intell guy or non-intell guy. The big issue for Blair and Panetta is strategic or tactical orientation. We are fighting two wars and the warfighter always screams they don't have enough intel or enough of anything for that matter. The dice are so loaded for support to the warfighter that critical strategic intelligence for the President and other senior leaders goes wanting due to time constraints on collection assets.
We need a significant re-orientation away from tactical support by CIA and other National agencies and back to their primary mission - direct intelligence support to the President. The last 15 years have seen an explosion of tactical intelligence capability with the advent of UAVs (which DoD fought against for so long due to the fighter pilot mentality). National systems need to be re-oriented to national priorities and away from tactical or operational desires of the warfighter.
I think the Panetta selection is another indication of the change coming. I was concerned that the selection of Jones as National Security Advisor and Blair as DNI underscored the great concern that I have about the militarization of intelligence. The selection of Panetta, with a much wider and deeper power base than either of them, makes me hopeful in this regard. Panetta is a skilled operator, he knows how to get things done. He knows how to get a budget approved and to make the wheels of government work. He will be a force - both in the Administration and on the Hill -- much larger than any career guy could be. This is good. It gives the CIA the opportunity to re-create itself within the current structure.
I used to do a lot of intelligence reporting. But I haven't really done any to speak of in a few years. So I'm coming at this cold. But I feel instinctively suspicious of the congressional reaction to this appointment. Rockefeller is saying he's not happy. But he was a very poor ranking member and then chairman of the senate committee. So I don't think that means much. If the Obama team really didn't make a courtesy call to Feinstein, who's taking over the overseeing committee, that was a goof -- just because there's enough hard slogging getting this kind of stuff done that you don't get people ticked over stupid things. But let's not let that distract from the substance of the issue. I'm not certain what I think about this appointment yet. But on first blush, the nature of the opposition makes me more inclined to support it.