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Former Republican Senator Chuck Hagel has emerged as the leading candidate to become President Barack Obama’s next secretary of defense and may be nominated as soon as this month, according to two people familiar with the matter.

Hagel, who served as an enlisted Army infantryman in Vietnam, has passed the vetting process at the White House Counsel’s office, said one of the people. The former Nebraska senator has told associates that he is awaiting final word from the president, said the other person. Both requested anonymity to discuss personnel matters.

Other contenders are Michele Flournoy, former defense undersecretary for policy, and Ashton Carter, deputy defense secretary, administration officials have said.

Obama invited Hagel, 66, to the White House on Dec. 4 to discuss the position with him, according to an administration official. The president hasn’t made a final decision, said another official. Both asked for anonymity to discuss internal deliberations.

White House Press Secretary Jay Carney today declined to comment on whether Obama is considering Hagel, saying only that the two-term onetime lawmaker was widely respected.

The current defense secretary, Leon Panetta, 74, has indicated he won’t serve in Obama’s second term. His successor will face a shrinking budget and the need to cut defense programs as well as managing the drawdown of U.S. troops in Afghanistan.

Reshaping Defense

The next defense secretary “is going to deal not simply with getting out of Afghanistan but with reshaping the force after more than 12 years of war,” said Anthony Cordesman, a military analyst at the Center for Strategic and International Studies in Washington.

“If anything escalates in Iran, either a conflict in the gulf, which affects 20 percent of the world’s oil supplies, you may well have to fight a serious conflict,” he said. “It isn’t a conflict that anybody has budgeted for.”

Obama also is reorienting U.S. defense and diplomatic firepower toward the Asia-Pacific region. One of the challenges for the next secretary will be to implement it.

“It isn’t enough to talk about moving forces to Asia and giving the Middle East equal priority,” Cordesman said. You have to “actually define what that means.”

Rice Withdraws

As Obama contemplates how to organize his national security team for his second term, he is weighing how the personalities will work with each other. In addition to defense, the president has at least three, and potentially four, positions to fill in the security area.

Susan Rice withdrew her name from consideration as Obama’s next secretary of state, saying a battle over her confirmation would disrupt the administration’s second-term agenda. Obama, in accepting her decision, said she would be continue to serve as U.S. ambassador to the United Nations and hinted at a different role in the future.

Obama has considered Rice to head the White House National Security Council, which is currently led by Tom Donilon, and his statement on her withdrawal said she “has limitless capability to serve our country now and in the years to come.”

Her withdrawal from state contention may clear the path for Democratic Senator John Kerry of Massachusetts to replace Hillary Clinton as secretary of state.

Another opening is at the Central Intelligence Agency, where David Petraeus resigned last month following the revelation of an extramarital affair.

Political Skill

Hagel “has the political skills to navigate some really treacherous waters,” said former Nebraska Senator Bob Kerrey. “He’ll enjoy wide respect in the military himself, and for a civilian leader, that’s important.”

“He enjoys the confidence of the president and has a good relationship with the Senate,” he said. “He stayed very close to the current operational needs of the military.”

He would join Transportation Secretary Ray LaHood as a Republican in the Democratic president’s cabinet.

In the Senate, Hagel’s committee assignments included Foreign Relations and the Select Committee on Intelligence. He retired after two terms, keeping a promise he made when he first ran for the Senate. Upon leaving office he joined the Georgetown University School of Foreign Service as a distinguished professor.

Obama considered naming Hagel to his cabinet during the president’s first term. Hagel was mentioned after the 2008 election as a contender to head the State Department and Veterans Affairs.

Like Obama, Hagel was a critic of the war in Iraq. He joined then-candidate Obama on an overseas trip that included stops in Iraq and Afghanistan in July 2008.

Obama in 2009 named Hagel as the co-chairman of the President’s Intelligence Advisory Board, an independent, nonpartisan panel that makes recommendations on improving the performance of U.S. intelligence gathering. He’s also chairman of a separate oversight board that reviews U.S. intelligence compliance with laws and the Constitution.

(Adds Rice’s withdrawal in the 12th paragraph.)