Exclusive: The last week has witnessed what might be called the Neocons’ Waterloo as their bid to reclaim power was beaten back by President Obama’s reelection and their last major government ally, CIA Director David Petraeus, resigned amid a sex scandal, Robert Parry reports.

By Robert Parry

The decisive defeat of Mitt Romney in the presidential race and the forced resignation of ex-Gen. David Petraeus as CIA director have marginalized America’s neoconservatives more than at any time in the past several decades, confining them mostly to Washington think tanks and media opinion circles.

The neocons bet heavily on a Romney victory as they envisioned a return to power, like what they enjoyed under President George W. Bush when they paved the way for the U.S. invasion of Iraq and dreamed of forcing “regime change” in Iran and Syria. During the campaign, Romney largely delegated his foreign policy to a cast of neocon retreads from the Bush era.

Yet, amid the wreckage of the past week with Romney blamed for a disastrous campaign and Petraeus embarrassed by a tawdry extramarital affair the neocons now find themselves without a strong ally anywhere inside the Executive Branch. And with Secretary of State Hillary Clinton, who sometimes sided with them, expected to leave shortly, the neocons could be even more isolated in the weeks ahead.

This reversal of fortune has led some key neocons to send out what amount to peace feelers to the Obama administration. The Weekly Standard editor William Kristol and Washington Post columnist (and Brookings Institution senior fellow) Robert Kagan have joined in urging Republicans to show more flexibility regarding their opposition to tax hikes on the wealthy.

Kristol made his views known on weekend talk shows, declaring on Fox News: “It won’t kill the country if we raise taxes a little bit on millionaires.” Kagan penned an op-ed column for the Washington Post that stated: “It seems pretty obvious that a compromise will require both tax reform, including if necessary some tax increases, and entitlement reform, since those programs are the biggest driver of the fiscal crisis.”

Some on the Left have cited the tax flexibility of Kristol, in particular, as an indication of Republican willingness to compromise seriously with President Obama in a second term. However, the truth is that neocons have never been economic conservatives. Instead, they have favored lavishing money on military programs and financing warfare to implement their imperial strategy of imposing political change by force. The budget has never been a high priority.

A Split on the Right

Over the past three-plus decades, the neocons have joined with cultural and economic conservatives more as a marriage of convenience than as a sign of true affection and shared values. Now, as the Religious Right and the Ayn Rand ideologues face harder times politically, the neocons are pondering a trial separation, if not an outright divorce.

The signs of a split among conservatives may be welcome news for President Obama who has been contemplating a number of controversial foreign policy moves in the post-election environment, including reaching an accommodation with Iran over its nuclear program. Harsh economic sanctions on Iran appear to have made Iranian leaders more serious about striking a deal and Obama is expected to seek a resolution in the weeks ahead.

However, the neocons have remained hostile to any concessions toward Iran. If Mitt Romney had won the presidency, the neocons likely would have hijacked the sanctions from their stated goal of achieving Iranian concessions on nuclear issues and transformed them into an economic club to bludgeon “regime change.” That could have set the stage for another Middle East war.

The significance of Petraeus’s resignation as CIA director is that the ex-four-star general was one of the neocons’ last insiders who could be counted on to frustrate Obama’s negotiations with Iran. Last year, Petraeus complicated U.S.-Iranian ties by pushing a dubious story about Iran planning a terrorist attack in Washington.

The White House and the Justice Department doubted that Iranian leaders were implicated in the harebrained scheme to assassinate the Saudi ambassador by blowing up a Washington restaurant. But Petraeus’s CIA embraced the suspicions and won over the Washington press corps, which largely swallowed the story whole.

It has since turned out that the central figure in the plot, an Iranian-American car dealer Mansour Arbabsiar, was diagnosed by doctors from his own defense team as suffering a bipolar disorder. In other words, his lawyers say he has a severe psychiatric ailment that affected his grasp of reality.

Nevertheless, the blaring news of the terror plot echoing across U.S. front pages and American TV screens strained the delicate negotiations between the Obama administration and the Iranian leadership. So, Obama’s inner circle saw a silver lining in Petraeus’s sudden departure: this neocon ally will not be around to sabotage talks again.

The Accommodating Obama

After winning the presidency in 2008, Obama extended an olive branch to the Republicans, the neocons and much of the Washington Establishment by retaining President George W. Bush’s last Defense Secretary Robert Gates and Bush’s military high command, including Petraeus who was then head of Central Command and thus overseeing the wars in Iraq and Afghanistan.

Amid media applause for this “team of rivals,” Obama also picked Hillary Clinton as his Secretary of State. As a New York senator, Clinton had developed close ties to the neocons and generally supported their hawkish positions on Iraq and Afghanistan.

Obama’s generosity, which included a decision not to seek any accountability for war crimes committed by the Bush administration, won him little reciprocity, however. Secretary Gates and Gen. Petraeus, with the tacit support of Secretary Clinton, blocked Obama’s interest in hearing less aggressive options on Afghanistan. They essentially steered him into support of a major troop “surge.”

Behind the young President’s back, Gen. Petraeus even mounted a P.R. campaign in support of a larger and longer Afghan War. In 2009, when Obama was weighing what to do about Afghanistan, Petraeus personally arranged extraordinary access to U.S. field commanders for two of his influential neocon friends, Max Boot of the Council on Foreign Relations and Frederick Kagan of the American Enterprise Institute.

“Fears of impending disaster are hard to sustain if you actually spend some time in Afghanistan, as we did recently at the invitation of General David Petraeus, chief of U.S. Central Command,” they wrote upon their return when they penned a glowing report in about the prospects for success in Afghanistan if only President Obama sent more troops and committed the United States to stay in the war for the long haul.

In mid-2011, Gates finally left the Pentagon, with Obama replacing him with CIA Director Leon Panetta, who had emerged as a trusted Obama adviser. To fill the CIA job, Obama named Petraeus partly to prevent the ambitious general from launching a political career as a Republican, including possibly becoming the GOP’s presidential standard-bearer in 2012.

Obama’s move was risky, in that Petraeus could use his position at the CIA to leak out information to his neocon allies that could undercut Obama’s foreign policies, a possibility that appears to have come to pass in the alleged Iranian assassination plot.

So, when the White House learned that Petraeus had entangled himself in a sex scandal, there was no rush to help the CIA chief extricate himself. Rather than sweeping the scandal under the rug and letting Petraeus stay on as he apparently expected or concocting a cover story for a graceful exit, the Obama administration let the story play out in all its messy details.

Decks Cleared

Between the outcome of the election and the departure of Petraeus, President Obama now has the chance to take full control of his foreign policy. The neocons also find themselves sitting on the outside looking in more so than at any time since the 1970s when they emerged as a group of hawkish ex-Democrats and embittered ex-Leftists who defected to Ronald Reagan.

Many neocons worked on Reagan’s presidential campaign in 1980 and were rewarded with prominent jobs on President Reagan’s foreign policy team, the likes of Elliott Abrams, Richard Perle, Paul Wolfowitz and Frank Gaffney. Though their influence ebbed and flowed over the 12 years of Republican rule, the neocons established themselves as a potent force in Washington policymaking.

Even after President Bill Clinton took office, the neocons retained some measure of influence in his administration and became favorites on newspaper op-ed pages and at powerful think tanks, including some that were regarded as center and center-left, such as the Council on Foreign Relations and the Brookings Institution.

The neocons reached the apex of their power under President George W. Bush when they persuaded the inexperienced Bush to respond to the 9/11 attacks by invading and occupying Iraq, which had nothing to do with al-Qaeda or 9/11.

Iraq had long been on the neocon target list as a threat to Israel. The neocons also envisioned using occupied Iraq as a base for forcing “regime change” in Iran and Syria, with the ultimate goal of allowing Israel to dictate peace terms to its near-in enemies, Lebanon’s Hezbollah and Palestine’s Hamas.

The neocon hubris in Iraq contributed to the geopolitical disaster there as nearly 4,500 U.S. soldiers died and hundreds of billions of dollars were wasted. Finally, neocon power began to recede. By the end of his administration, Bush was resisting pressure from Vice President Dick Cheney and the neocons around him to bomb Iran.

Still, when Barack Obama won the presidency in 2008, the neocon influence remained strong enough in Official Washington that the new President left in place a number of key neocon allies, especially Gates and Petraeus, and named Hillary Clinton as Secretary of State.

Though Obama upset the neocons by completing the military withdrawal from Iraq, he accepted their plan for an expanded war in Afghanistan, and he continued much of Bush’s “war on terror,” albeit without the name.

Turning on Obama

Obama’s concessions garnered some favorable neocon commentaries in important news outlets, such as The Washington Post, but the neocons still rallied behind Mitt Romney’s campaign to oust Obama in 2012. Romney assembled a team of Bush retreads to write his foreign policy white paper, “An American Century.”

The title was an obvious homage to the neocon Project for the New American Century, which in the 1990s built the ideological framework for the disastrous Iraq War and other “regime change” strategies. Romney recruited Eliot Cohen, a founding member of the Project for the New American Century and a protÃ©gÃ© of prominent neocons Paul Wolfowitz and Richard Perle, to write the foreword.

Romney’s white paper chastised Obama for pulling out the 30,000 “surge troops” from Afghanistan by mid-2012 and conducting a gradual withdrawal of the remaining 70,000 by the end of 2014. Instead, Romney’s white paper argued that Obama should have followed the advice of field commanders like then-Gen. David Petraeus and made withdrawals either more slowly or contingent on U.S. military success.

However, like Napoleon seeking to regain his former glory through an audacious challenge to his entrenched adversaries, the neocons encountered a Waterloo instead. Their strategic defeat began with Romney’s loss to Obama on Nov. 6 but it then grew worse with the humiliating resignation of Petraeus from the CIA. Now, the neocons are left with no major foothold within the Executive Branch.

But no need for tears. The neocons still retain their lucrative niches at prominent think tanks, as talking heads on TV and on influential op-ed pages.

Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s. You can buy his new book, America’s Stolen Narrative, either in print here or as an e-book (from Amazon and barnesandnoble.com).