WASHINGTON | Wed Mar 13, 2013 1:15am EDT

WASHINGTON (Reuters) - A defense contractor better known for building jet fighters and lethal missiles says it has found a way to slash the amount of energy needed to remove salt from seawater, potentially making it vastly cheaper to produce clean water at a time when scarcity has become a global security issue.

The process, officials and engineers at Lockheed Martin Corp say, would enable filter manufacturers to produce thin carbon membranes with regular holes about a nanometer in size that are large enough to allow water to pass through but small enough to block the molecules of salt in seawater. A nanometer is a billionth of a meter.

Because the sheets of pure carbon known as graphene are so thin - just one atom in thickness - it takes much less energy to push the seawater through the filter with the force required to separate the salt from the water, they said.

The development could spare underdeveloped countries from having to build exotic, expensive pumping stations needed in plants that use a desalination process called reverse osmosis.

"It's 500 times thinner than the best filter on the market today and a thousand times stronger," said John Stetson, the engineer who has been working on the idea. "The energy that's required and the pressure that's required to filter salt is approximately 100 times less."

Access to clean drinking water is increasingly seen as a major global security issue. Competition for water is likely to lead to instability and potential state failure in countries important to the United States, according to a U.S. intelligence community report last year.

"Between now and 2040, fresh water availability will not keep up with demand absent more effective management of water resources," the report said. "Water problems will hinder the ability of key countries to produce food and generate electricity."

About 780 million people around the world do not have access to clean drinking water, the United Nations reported last year.

"One of the areas that we're very concerned about in terms of global security is the access to clean and affordable drinking water," said Tom Notaro, Lockheed business manager for advanced materials. "As more and more countries become more developed ... access to that water for their daily lives is becoming more and more critical."

PRODUCTION CHALLENGE

Lockheed still faces a number of challenges in moving to production of filters made of graphene, a substance similar to the lead in pencils. Working with the thin material without tearing it is difficult, as is ramping up production to the size and scale needed. Engineers are still refining the process for making the holes.

It is not known whether Lockheed faces commercial competition in this area. But it is not the only one working on the technology.

Jeffrey Grossman, an associate professor at the Massachusetts Institute of Technology who has done research on graphene membranes for filtration, said he was not familiar with details of Lockheed's work. But he said finding a way to produce graphene sheets with nanometer-sized holes could produce a major advancement in desalination efficiency.

"If you can design a membrane that's completely different than what we use today, then there's a chance for more than two orders of magnitude (100 times) increase in the permeability of the membrane," Grossman said.

Stetson, who began working on the issue in 2007, said if the new filter material, known as Perforene, was compared to the thickness of a piece of paper, the nearest comparable filter for extracting salt from seawater would be the thickness of three reams of paper - more than half a foot thick.

"It looks like chicken wire under a microscope, if you could get an electron microscope picture of it," he said. "It's all little carbon atoms tied together in a diaphanous, smooth film that's beautiful and continuous. But it's one atom thick and it's a thousand time stronger than steel."

Thickness is one of the main factors that determines how much energy has to be used to force saltwater through a filter in the reverse osmosis process used for desalination today.

"The amount of work it takes to squeeze that water through the torturous path of today's best membranes is gone for Perforene," Stetson said. "It just literally pops right through because the membrane is thinner than the atoms it's filtering."

Notaro said Lockheed expects to have a prototype by the end of the year for a filter that could be used as a drop-in replacement for filters now used in reverse osmosis plants.

The company is looking for partners in the filter manufacturing arena to help it commercialize Perforene as a filter in the 2014-2015 time frame, he said.

Lockheed officials see other applications for Perforene as well, from dialysis in healthcare to cleaning chemicals from the water used in hydraulic fracturing, or "fracking," of oil and gas wells.

(Editing by Warren Strobel and Jackie Frank)

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WASHINGTON | Tue Feb 12, 2013 9:37pm EST

WASHINGTON (Reuters) - The Pentagon said it plans to continue using lithium-ion batteries on the new F-35 fighter jet despite problems with similar batteries that have grounded Boeing Co's new 787 airliner and are causing Airbus to rethink their use on its A350 jet.

Joe DellaVedova, spokesman for the Pentagon's $396 billion F-35 program office, said on Tuesday that the lithium-ion batteries used on the new radar-evading fighter were made by different manufacturers than those used on the 787, and the jet's battery systems had been rigorously tested.

"The bottom line is the lithium-ion batteries used on the F-35s have been through extensive tests and have redundant systems to protect the aircraft and battery compartments; they are considered safe," DellaVedova said.

DellaVedova said there had been some irregularities with the lithium-ion batteries not starting properly in cold temperatures that were being addressed, but no issues affecting flight safety had come up during years of testing.

All 50 Boeing Dreamliners in commercial service were grounded worldwide on January 16 after a series of battery-related incidents, including a fire on board a parked 787 at Boston's Logan International Airport and an in-flight problem on another airplane in Japan.

The groundings have cost airlines tens of millions of dollars, with no solution yet in sight, and have sparked growing concerns among aerospace industry executives about whether the powerful but delicate backup energy systems are technically "mature", or predictable.

The U.S. National Transportation Safety Board, which is examining the 787 fire in Boston, said it was looking at the total design of the Boeing 787 battery, built by Japan's GS Yuasa Corp on behalf of France's Thales SA, including the charging system, electrical interconnections, and their thermal isolation of different battery cells from each other.

BATTERY SAFETY

Two of the biggest lithium-ion batteries on the F-35 warplane are made by the French company Saft Groupe SA, which also makes batteries for Airbus, part of European aerospace group EADS NV. Saft last month expressed confidence that lithium-ion technology was safe.

But people familiar with the matter have said that Airbus officials are reconsidering use of the batteries on the A350, which would be the second large passenger jet to fly on lithium-ion batteries for backup electrical power after the Dreamliner, which pioneered their use in passenger transport to support an increasing array of electrical systems.

Airbus said last week it had a plan B for its battery and time to respond to any rule changes.

DellaVedova said military officials remained confident in the lithium-ion batteries used on the F-35, and there were no discussions under way to swap them out for heavier nickel-cadmium batteries.

Lockheed Chief Executive Marillyn Hewson last month underscored her confidence in the lithium-ion batteries, telling reporters that the batteries on the F-35 were made by a different company and had been tested extensively.

Lockheed spokesman Mike Rein said more than a dozen F-35 jets were wired with extensive monitoring equipment to carry out development testing and no flight safety issues had been detected with the batteries during over 6,000 hours of flight testing on the airplanes.

"We are monitoring our full battery system on a daily basis as we flight test. We have continual data updates, and we've had no indication that we are connected to the same issues that grounded the 787," Rein said.

The F-35's battery system has run into a different problem on the ground, with some airplanes failing to start during cold temperatures under 10 degrees Celsius, DellaVedova said.

He cited "minor irregularities" that had been traced back to a software issue in the jet's battery charger control unit, and a fix was in the works for new jets in production and would be retrofitted on earlier jets. The problem, he said, was not related to the batteries themselves.

In the meantime, he said, measures were being taken to warm the area near the battery on cold days prior to start.

One defense official said maintainers at Eglin Air Force Base in Florida were using space heaters in some to warm the jets, which required removing a panel of the plane's stealthy coatings. "It's not ideal when you're talking about a fighter jet that has to be ready to go at a moment's notice," said the official, who was not authorized to speak on the record.

Separately, the Pentagon's F-35 program office on Tuesday lifted a January 18 order that grounded nine F-35B developmental test aircraft after a fuel line detached just before a training flight at Eglin Air Force Base in Florida.

Vice Admiral David Dunaway, head of Naval Air Systems Command, was briefed Tuesday on the inspections of the faulty components, and could lift flight restrictions on 16 additional F-35B model jets being used for training as early as Wednesday, according to two sources familiar with the matter.

(Additional reporting by Tim Hepher in Paris; Editing by Edmund Klamann)

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U.S. President Barack Obama's nominee for Secretary of Defense, former Senator Chuck Hagel (L), stands next to counterterrorism adviser John Brennan (R), the nominee for CIA Director, at the White House in Washington January 7, 2013.

WASHINGTON | Thu Jan 10, 2013 7:52pm EST

WASHINGTON (Reuters) - Chuck Hagel, President Barack Obama's pick to become the next U.S. defense secretary, has begun calling critics in the Senate in an attempt to clarify his views about how to deal with Iran, Hezbollah and Hamas before his upcoming nomination hearing.

The decorated Vietnam veteran's Republican credentials have done little to rally support with his party, which he publicly split with as a senator by opposing the Iraq war during the Bush administration.

Hagel's private calls to lawmakers and efforts by supporters to defend him publicly are part of what is likely to be a hard-fought battle over his nomination. Opponents tried for weeks to dissuade Obama from choosing the former Nebraska senator.

One prominent senator, Republican Lindsey Graham of South Carolina, predicted even before his nomination that Hagel, if confirmed, would be "the most antagonistic secretary of defense towards the State of Israel in our nation's history."

U.S. officials who have spoken with Hagel since he was nominated on Monday say he has been calling senators before confirmation hearings begin in the coming weeks. Current and former U.S. officials say he is particularly concerned with portrayals of his record on Iran. Critics accuse him of opposing sanctions and being satisfied with containing Tehran, as opposed to preventing it from obtaining a nuclear weapon.

Iran says its nuclear ambitions are peaceful.

"He feels that who he is, what he stands for and what his attitudes are have been misrepresented and distorted," said Dennis Ross, a former top Obama Middle East adviser.

"What he said to me very clearly was that ... he deeply believes that Iran does need to be prevented from having the bomb and that he doesn't believe in containment."

By tradition, Cabinet nominees are expected to avoid public comment until their confirmation hearings.

Republican Senator John Cornyn of Texas, in an opinion piece entitled "Why I Can't Support Hagel," accused Hagel of failing to understand the threat from Iran and groups like Hamas.

One U.S. official who is familiar with the information Hagel is providing to members of the Senate defended Hagel's approach to the militant groups Hezbollah and Hamas. As a senator, Hagel decided not to join 88 other senators in a 2006 letter calling on the European Union to designate Lebanon-based Hezbollah a terrorist organization.

The official, speaking on condition of anonymity, said Hagel believes it is not appropriate for members of Congress to write foreign leaders and that they should write the president, instead. More important, the official said, was Hagel's voting record.

"There were a number of pieces of legislation that actually called on Hezbollah to be a terrorist organization that he supported and voted for," the official said.

On Hamas, the Palestinian group that controls the Gaza Strip, the official said Hagel also felt his position was being misrepresented. Despite claims to the contrary by critics, Hagel does not support direct, unconditional engagement with Hamas and agrees it must first renounce violence, he said.

The officials declined to say which lawmakers Hagel has spoken with but said they included members of both parties. Republican Senator John McCain of Arizona has spoken with him and the two agreed to meet, McCain's spokesman said.

Outgoing Defense Secretary Leon Panetta, following two meetings with Hagel this week, on Thursday predicted that Hagel would ultimately be confirmed as his successor.

"In these confirmation battles, there are a lot of charges that will be out there," Panetta said. "But ultimately, the truth prevails. And I think the truth in this case will mean that he'll be confirmed."

(Editing by Warren Strobel and Doina Chiacu)

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U.S. Defense Secretary Leon Panetta speaks about a suicide bombing near a NATO base, during a joint news conference with Afghan President Hamid Karzai at the Presidential Palace in Kabul December 13, 2012.

WASHINGTON | Thu Jan 10, 2013 6:41pm EST

WASHINGTON (Reuters) - Defense Secretary Leon Panetta said on Thursday he had ordered the U.S. military services to freeze civilian hiring, delay maintenance work and reduce other spending as fears grow the Pentagon will likely face another huge budget cut in March.

Speaking at a Pentagon news conference, Panetta acknowledged for the first time that across-the-board cuts he had said would be "devastating" to national security were increasingly possible and "we simply cannot sit back now and not be prepared for the worst."

The Pentagon is facing some $500 billion in cuts to defense spending over the next decade under a procedure known as sequestration. That comes on top of $487 billion in cuts over a decade that the department began implementing last fiscal year.

The new round of cuts, ordered by Congress as part of the effort to reduce the massive U.S. deficit, were due to go into effect on January 2, but lawmakers reached a deal on New Year's Day delaying the spending reductions until March 1.

The White House had told the Pentagon until recently not to plan for the across-the-board budget cuts. Those cuts had been approved by the Obama administration and Congress to try to force lawmakers to reach a compromise spending deal. But they were never expected to take effect because they hit almost everything equally, regardless of strategic importance.

Under the new law, the Pentagon faces $45 billion in cuts this year unless Congress can agree on an alternative package of spending reductions. Analysts say that even if Congress approves an alternative deal, that could include hundreds of billions of dollars in additional cuts to projected defense spending.

"My fear in talking to members of Congress is that ... this issue may now be in a difficult place in terms of their willingness to confront what needs to be done to detrigger sequester," Panetta said.

'PRUDENT MEASURES'

"Regardless of what Congress does or fails to do, we still have an obligation to protect this country," he added. "So for that reason, I have asked the military services and the other components to immediately begin implementing prudent measures that will help mitigate our budget risk."

Panetta, who will leave office once his replacement is confirmed by the U.S. Senate, said he had asked the military services to freeze civilian hiring, curtail non-critical facilities maintenance, delay awarding certain contracts and take other steps to reduce spending.

He said he also had asked the services as a precautionary measure to begin planning how they would implement unpaid leave for the department's nearly 800,000 civilian employees if that became necessary.

The department's civilian workers can be placed on unpaid leave for up to 22 work days - about a calendar month - but the Pentagon must notify Congress of the intended step 45 days in advance.

A top defense analyst said on Wednesday that sequestration would probably require all 791,000 civilian defense employees to take the full amount of furlough possible in order to achieve the savings that would be required in the personnel accounts.

A defense official said the services also were directed to curtail travel, training and conferences; to reduce expenses on things like supplies, business information technology and ceremonies; and to cancel ship and aircraft maintenance in the third and fourth quarters as necessary.

Army General Martin Dempsey, chairman of the Joint Chiefs of Staff, said that if the budget cuts hit: "We'll continue to resource those who are next to deploy. ... It would be unconscionable to do otherwise. Likewise, we'll continue to care for our wounded warriors and their families."

"But for the rest of the force, operations, maintenance and training will be gutted. We'll ground aircraft, return ships to port and sharply curtail training across the force," he said. "Within months, we will be less prepared. Within a year, we'll be unprepared."

Panetta said the Pentagon's budget crisis was compounded by the fact that Congress had not approved the department's spending plan for the 2013 fiscal year, instead extending funding under a continuing resolution that keeps it at 2012 levels, which represents a 5 percent cut.

He said that resolution was to expire on March 27 and if Congress failed to pass the 2013 appropriations bill, it could end up extending spending at 2012 levels for the rest of the fiscal year, which ends on September 30. That would take a further $11 billion out of the Pentagon's operations and maintenance budget.

"If you take the total sum of all these cuts, we're looking at a 19 percent to 20 percent reduction in the base budget operating dollars for active units, including what looks like a cut of almost 30 percent for the Army," Panetta said.

(Editing by Peter Cooney)

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WASHINGTON | Thu Jan 31, 2013 9:29pm EST

WASHINGTON (Reuters) - Republican lawmakers attacked Chuck Hagel on Thursday at a contentious hearing over his nomination to become the next U.S. defense secretary, questioning his judgment on war strategy and putting him broadly on the defensive.

In one of the most heated exchanges, Senator John McCain aggressively questioned Hagel, interrupting him and talking over him at times. He voiced frustration at the former Republican senator's failure to say plainly whether he was right or wrong to oppose the 2007 "surge" of U.S. troops in Iraq.

"Your refusal to answer whether you were right or wrong about it is going to have an impact on my judgment as to whether to vote for your confirmation or not," McCain said.

Hagel, who like McCain is a decorated Vietnam War veteran, declined to offer a simple yes or no answer, responding, "I would defer to the judgment of history to sort that out."

As President Barack Obama's choice to lead the Pentagon in his second term, Hagel could clinch Senate approval thanks to help from majority Democrats. But he appeared to pick up little new Republican support as his hours-long hearing wore on.

Although Republicans could create procedural hurdles to block him, there were no overt promises at the hearing to do so.

"Unless the Republicans filibuster him, the nomination is going to go through," said Bill Galston, a former adviser to President Bill Clinton.

Ford O'Connell, a Republican strategist, said, "It's been a tough day for Chuck Hagel overall."

"I think the Republicans are trying to decide whether they really want to push the pedal to the floor with Hagel," he said.

The Senate Armed Services Committee's Democratic chairman, Carl Levin, praised Hagel's performance after the nearly eight-hour hearing ended. "I thought he did very well. I thought he was responsive. He kept his cool. His experience was both modestly and eloquently described," the Michigan senator said.

The earliest the committee will vote on Hagel's nomination is next Thursday, Levin added.

Hagel's fellow Republicans dredged up a series of his past controversial statements on Iran, Israel and U.S. nuclear strategy, trying to paint him as outside mainstream security thinking. Even in polarized Washington, the grilling was highly unusual for a Cabinet nominee.

Senator Lindsey Graham of South Carolina laid into Hagel for once accusing a "Jewish lobby" of intimidating people in Washington, comments Hagel repeatedly said he regretted. Asked whether he could name one lawmaker who had been intimidated, Hagel said he could not. It was one of the many times he appeared uncomfortable.

"I can't think of a more provocative thing to say about the relationship between the United States and Israel and the Senate or the Congress than what you said," Graham said.

SEEKING TO SET RECORD STRAIGHT

If he is ultimately confirmed, Hagel will take over the Pentagon at a time of sharp reductions in defense spending, and with the United States still facing major challenges, including China, Iran and North Korea.

Hagel, speaking publicly for the first time since the attacks against his nomination began, seemed cautious and halting at times. He sought to set the record straight, assuring the panel that he backed U.S. policies of preventing Iran from obtaining a nuclear weapon and supporting a strong Israel.

"No one individual vote, no one individual quote, no one individual statement defines me, my beliefs, or my record," Hagel said in opening remarks to the packed hearing room.

"My overall world view has never changed: that America has and must maintain the strongest military in the world."

In an unusual reversal of partisanship, Democrats, more than Republicans, gave Hagel sympathetic support and time to air his views, which adhered broadly to Pentagon policy.

"I feel like I want to apologize for some of the tone and demeanor from today," said Senator Joe Manchin, a Democrat from West Virginia.

Galston said Thursday's hearing appeared to sap some of the momentum Hagel had going into the session after weeks of pushback by his allies against criticism.

He added, "It's going to be harder to present Hagel's confirmation now as a victory for bipartisanship - overcoming doubts, or coming together around sensible mainstream policies."

Despite the harsh tone from many Republicans, some senators from the party approached Hagel more collegially.

Senator Saxby Chambliss of Georgia called Hagel by his first name and exchanged jokes with him during his testimony. He served alongside Hagel in the Senate.

But Hagel years ago angered many Republicans by breaking with his party over the handling of the Iraq war.

It was one of several contentious chapters of modern U.S. history that surfaced during the session, from the Vietnam War, where Hagel served as an infantryman and was wounded, to former President Ronald Reagan's call for nuclear disarmament.

Hagel, who would be the first Vietnam veteran to serve as Pentagon chief, also was questioned on his view of the Pentagon budget. He is known as an advocate for tighter spending controls.

'WRONG' MAN FOR THE JOB

Even before Hagel started speaking, James Inhofe, the panel's senior Republican, called him "the wrong person to lead the Pentagon at this perilous and consequential time."

"Senator Hagel's record is deeply troubling and out of the mainstream. Too often it seems he is willing to subscribe to a worldwide view that is predicated on appeasing our adversaries while shunning our friends," said Inhofe of Oklahoma.

McCain's harsh attitude toward Hagel - whom he also singled out for opposing Obama's increase of forces in Afghanistan - was a far cry from their past, warm ties. McCain campaigned for Hagel in his Nebraska U.S. Senate race in 1996, and Hagel was national co-chairman of the Arizona Republican's unsuccessful 2000 presidential bid.

On Thursday, McCain said concerns about Hagel's qualifications ran deep.

"Our concerns pertain to the quality of your professional judgment and your world view on critical areas of national security, including security in the Middle East," he said.

In the entire Senate, which would vote on Hagel if he is cleared by the committee, only one of the 45 Republicans - Mississippi's Thad Cochran - has said he backs Hagel.

Senators Marco Rubio of Florida and Dan Coats of Indiana on Thursday joined the list of Republicans who said they would vote against Hagel.

(Additional reporting by David Alexander; Editing by Warren Strobel, Jackie Frank and Peter Cooney)

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WASHINGTON | Thu Dec 20, 2012 6:05pm EST

WASHINGTON (Reuters) - The White House on Thursday came to the defense of former Republican Senator Chuck Hagel against critics who have attacked his record on Israel and Iran in a bid to head off his possible nomination as President Barack Obama's next Pentagon chief.

With Hagel considered a leading choice for defense secretary, the administration joined allies rallying to support him against the onslaught, led by some pro-Israel groups and neo-conservatives, but also including former colleagues on Capitol Hill.

It was the second time since Obama's re-election last month that the White House has found itself forced to defend a Cabinet candidate who has yet to be nominated for anything, a source of frustration for the president's advisers.

Obama's aides have been preparing for a realignment of his national security team, possibly by Friday, sources familiar with the process have said. But with Obama focused on the "fiscal cliff" standoff and the Hagel controversy also fueling concerns, an announcement could easily be delayed.

Some American Jewish leaders contend Hagel, who left the Senate in 2008, at times opposed Israel's interests, voting several times against U.S. sanctions on Iran, and made disparaging remarks about the influence of what he called a "Jewish lobby" in Washington.

White House spokesman Jay Carney made clear Obama's faith in the former lawmaker, who is a decorated Vietnam war veteran.

"Senator Hagel fought and bled for his country. He served his country well. He was an excellent senator," Carney said, without acknowledging that Hagel was under consideration to succeed Defense Secretary Leon Panetta. He did not address any of the specific criticisms aimed at Hagel.

The controversy over Hagel's possible nomination comes after U.N. Ambassador Susan Rice withdrew from consideration for secretary of state last week amid withering attacks from Republicans over her role in initial explanations of the deadly September assault on the U.S. consulate in Benghazi, Libya.

"We've been through this before with Ambassador Rice where there's an effort to go after somebody," Carney said.

The drumbeat of criticism against Hagel could prompt Obama to reconsider whether it would be worth the likely Senate confirmation battle. But the White House has given no sign of dropping him the president's short list.

Obama himself has been criticized by some Jewish leaders for his approach to close U.S. ally Israel, especially given his strained relations with Prime Minister Benjamin Netanyahu.

BATTLE LINES DRAWN

Some of the attacks on Hagel stem from comments he made to former U.S. diplomat Aaron David Miller for his 2008 book, "The Much Too Promised Land," in which Hagel was quoted as saying, "The Jewish lobby intimidates a lot of people up here."

Senator Lindsey Graham of South Carolina, a member of the Armed Services Committee, said earlier this week that Hagel would "have to answer for that comment" if he is nominated.

William Kristol of the conservative Weekly Standard wrote in a recent column that Hagel "has anti-Israel, pro-appeasement-of-Iran bona fides."

Hagel's supporters have started firing back, insisting he has shown himself supportive of Israel and tough on Iran.

"His views are strong, solid on American foreign policy. I'm amazed at the turnout of the neo-cons and so on," Brent Scowcroft, national security adviser under President George H.W. Bush, told Reuters.

He was referring to the neo-conservatives, a loose group of right-wing foreign policy thinkers who gained ascendancy during the tenure of Obama's Republican predecessor, George W. Bush.

And Jeremy Ben-Ami, president of J Street, a liberal American Jewish group, denounced what he said was a "smear campaign" against Hagel.

Democratic presidents have sometimes turned to Republicans to fill key national security posts. Former President Bill Clinton chose former Senator William Cohen to lead the Defense Department, and Obama kept Robert Gates, former President George W. Bush's last defense secretary, on board for part of his term.

QUESTIONS ON CUBA

Florida Republican Senator Marco Rubio's office said he also would have questions about Hagel's record on Cuba, and raised the possibility of putting a hold on his nomination. Hagel has voiced doubts about the wisdom and effectiveness of maintaining the decades-old U.S. trade embargo on communist Cuba.

"Promoting democracy in Latin America is a priority for Senator Rubio, and he's put holds on other administration nominees over the issue," said Rubio spokesman Alex Conant.

"If President Obama were to nominate Senator Hagel for a cabinet position, I'm sure we would have questions about Cuba positions." Rubio is Cuban-American.

Adding to the sense of battle lines drawn, Hagel's critics and allies are circulating dueling fact-sheets on Capitol Hill.

Many Republicans consider Hagel suspect. He was an early dissenter on the Iraq war - an issue that helped Obama rise to prominence - and crossed the aisle to endorse the president in his successful re-election bid this year.

Since leaving the Senate after two terms, he has also been a vocal critic of his own party's fiscal policies.

Obama is said to feel comfortable with Hagel. The two traveled together to the Middle East during the 2008 campaign. Hagel currently co-chairs Obama's Intelligence Advisory Board.

(Additional reporting by Steve Holland and Warren Strobel; editing by Todd Eastham)

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