The discussions between Abdulmutallab, his lawyers and federal investigators began last week as Justice Department officials explored the possibility of offering Abdulmutallab a plea deal in exchange for his cooperation and information he has about the terror network.
Sen. Kit Bond, R-Mo., the ranking Republican on the Intelligence Committee told Blair he disagreed with the conclusion that the case was handled properly because the suspect has been giving investigators information.
Law enforcement officials said they read Abdulmutallab his rights only after he underwent medical treatment and then refused to talk. They say the fact that he is now cooperating shows they are effective.
"There should be a decision made after consultation with the relevant agencies and the intelligence community when an enemy combatant comes in, before the Department of Justice gives the order to Mirandize him," Bond said. "He's an enemy combatant and the decision ought to be made by the intelligence -- with the participation of the intelligence community."
The decision to issue a Miranda warning to Abdulmutallab was reached by the FBI's chief of counterterrorism in conjunction with Justice Department attorneys, Mueller said.
Intelligence officials say they have stepped up efforts to thwart al Qaeda attacks but that it is becoming more difficult to identify the threat posed by an evolving al Qaeda, which has become more reliant on its regional terror networks to conduct attacks.
"Counterterrorism efforts against al Qaeda have put the organization in one of its most difficult positions since the early days of Operation Enduring Freedom in late 2001," Blair told lawmakers today. "However, while these efforts have slowed the pace of anti-U.S. planning and hindered progress on new external operations, they have not been sufficient to stop them."
Much of the urgent concern about another possible attack is fueled by the near-miss bombing attempt on Christmas day.
"We did not identify [Abdulmutallab] before he boarded Northwest Flight 253 on Christmas Day. We should have," Blair testified Tuesday.
Panetta shared Blair's assessment of the al Qaeda threat as something that has changed since the terror attacks of Sept. 11, 2001, when four coordinated groups of terrorists hijacked separate airliners to crash them in New York and Washington.
"My greatest concern and what keeps me awake at night is that al Qaeda and its terrorist allies and affiliates could very well attack the United States in our homeland," the CIA director said. "The biggest threat I see is not so much that we face another attack similar to 9/11. I think the greater threat is that al Qaeda is adapting their methods in ways that oftentimes make it difficult to detect."
Al Qaeda has found new safe havens and established "regional nodes in places like Yemen and Somalia, the Maghreb [North Africa] and others," he said.
Panetta also warned that he is becoming increasingly concerned about threats from "lone wolf" terrorists who act on their own without any central planning from an established terror network such as al Qaeda.
He cited the case of Ft. Hood shooter Maj. Nidal Hasan as one such case of a "lone wolf" terrorist.