Panetta talked about the steps the Defense Department had taken to prepare for the sequester -- the automatic federal spending cuts scheduled to take effect March 1 -- saying they could be reversed as long as they never go into effect.
"The responsibility to protect our citizens rests with both the administration and the Congress," Panetta said.
Senators who called the hearing wanted Panetta and Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, to explain what measures the Pentagon had taken while the attack in Benghazi was taking place and what role the Defense Department should play in embassy security going forward.
A tense exchange between Sen. Lindsay Graham, R-S.C., and Sec. Panetta pointed to the confusion that still exists regarding what took place on the night of the attack.
Graham asked Panetta who was in charge of efforts to protect embassy staff during the attack.
Stumbling, Panetta's response was that the question was more complicated than that.
Later Gen. Dempsey jumped in, explaining that Gen. Carter Ham, the commander of U.S. Africa Command would have been in charge of the operation on the ground once Department of Defense troops were in Libya.
The offical report by the Accountability Review Board examining the U.S. response to the attack found embassy security relied heavily on a local militia that proved inadequate and ineffective.
Sen. Kay Hagan, D-N.C., asked if Panetta was comfortable with how well-trained those forces were. The short answer? No.
"These countries that are going through the transitions that have taken place since their various revolutions, one of the areas that's hurting is the quality of their ability to provide security for the embassies that are located in their countries," Panetta said. "That's a problem that we're having to confront more and more in that area of the world."
Former Secretary of State Hillary Clinton testified before the Senate Foreign Relations Committee two weeks ago about the State Department's role in the security failures that allowed for the attack in Benghazi.
Clinton endured brusque questioning and became emotional herself at times. She once again took responsibility for the State Department's security failures that led to the attack, but she defended the administration's actions that day and in the weeks following the tragedy.
"It's also important to recall that in that same period we were seeing violent attacks on our embassies in Cairo, Sana'a, Tunis, Khartoum, as well as large protests outside many other posts where thousands of our diplomats serve," Clinton told the Senate Foreign Relations Committee.
Panetta made the same point today, saying, "We were also concerned about potential threats to U.S. personnel in Tunis, Tripoli, Cairo, Sana'a and elsewhere that could potentially require a military response."
In his opening remarks Levin asked the outgoing Secretary of Defense to address the threat posed by groups behind the conflict in Algeria.
The hearing is expected to be Panetta's last before he steps down pending the confirmation of his successor, former Sen. Chuck Hagel. On Wednesday Levin announced there would be a delay in the committee's vote on Hagel's nomination, pending the receipt of additional documents requested by some senators.