Carolyn Kaster/AP

Ash Carter to Retire

This story has been updated.

Ash Carter, the Pentagon’s top budget official and deputy secretary of defense, will retire in December.

Carter’s decision, which comes as Congress grapples with the administration in a government shutdown, leaves a mountain of uncertain budget decisions for Defense Secretary Chuck Hagel and the administration to manage.

In a statement, Hagel said he “reluctantly accepted” Carter’s decision on Thursday. “I will always be grateful that Ash was willing to stay on and serve as my Deputy Secretary. I have continually relied upon Ash to help solve the toughest challenges facing the Department of Defense.”

Indeed, Carter, who previously was the Pentagon’s top weapons buyer, has long been considered the top man “in the building,” offering stability for the Defense Department and defense industry community as secretaries Robert Gates, Leon Panetta and Hagel cycled through office under President Obama. “There are few people who understand the operations, mechanics and engineering, as well as the policies and the foreign relationships, like Ash carter. His departure is significant,” said a defense official.

In his resignation letter to Hagel, which was obtained by Defense One, Carter said he has been planning to leave, but delayed giving his official notice because of “the turbulence surrounding the fiscal situation. But I have decided that this situation might well continue and I don’t want any more time to pass before giving you the opportunity to begin a smooth transition.”

Carter said serving as deputy defense secretary has been “the greatest honor of my life.” He has served, directly and indirectly, under 11 defense secretaries. “I have loved every minute of working for this wonderful department,” he wrote. “But it is now time to focus my attention on moving forward to my next challenge. So it is time for me to go.”

Despite reports of that causing some tension between Hagel and Carter’s staffs, Hagel, in his early months as secretary, has clearly relied on Carter’s management skills. 

“I think there was a way for both to benefit from one another. There were a few moments of real partnership. One was as Hagel was in Asia last week, as the shutdown was looming, and getting these deep updates from Ash Carter about how he was bringing the building together to address some of the immediate fiscal challenges. That was a pretty powerful thing.”

“He has trust in Carter to keep the building running the best we can under these conditions. Even yesterday, when Hagel was out [at Dover Air Force Base] with the families of the four who had fallen, it was Ash Carter who was closing the deal with the Fisher House.”

Carter just passed the two-year mark in his current job and took no break from his previous post as under secretary of defense for acquisition, technology and logistics. By last year, he was on many short lists as a candidate for defense secretary before Obama tapped Hagel, last year.

The Pentagon has no succession plan for Carter’s position.

Here is the full statement from Hagel:

Earlier today, I met with Ash Carter and reluctantly accepted his decision to step down as Deputy Secretary of Defense on December 4th, after more than four and a half years of continuous service to the Department of Defense.

Ash has been an extraordinarily loyal and effective Deputy Secretary, both for me and Secretary Panetta. In his previous capacity as Undersecretary of Defense for Acquisition, Technology and Logistics, he provided outstanding support to Secretary Gates and - most importantly - to our men and women fighting downrange. He possesses an unparalleled knowledge of every facet of America’s defense enterprise, having worked directly and indirectly for eleven Secretaries of Defense over the course of his storied career.

I will always be grateful that Ash was willing to stay on and serve as my Deputy Secretary. I have continually relied upon Ash to help solve the toughest challenges facing the Department of Defense. I particularly appreciate his work spearheading the Strategic Choices and Management Review, which put the department in a far stronger position to manage through unprecedented budget uncertainty. He is a brilliant strategist and an excellent manager who helped enhance the department’s buying power, but Ash’s most recent tour of the department will be especially remembered for his tremendous efforts to provide more agile and effective support for our warfighters and their families. His compassion, love, and determination to overcome any and all bureaucratic obstacles earned him their abiding respect and appreciation.

I am confident that the department, and the country, will continue to benefit from Ash Carter’s service in the months and years ahead. I am thankful that Ash will continue to be at my side for the next two months, helping the Department of Defense manage through a very disruptive and difficult time, and ensuring a smooth transition within the office of the Deputy Secretary. The department will miss him - I will miss him.”