Today's military needs a personnel system that "reaches out to the skills we're going to need in cyber, in languages, in technology, and really tries to retain people in those areas", said Panetta.
He told MSNBC's "Morning Joe" program that the report will detail how the system is too out of date to deal with the challenges of the 21st century.
"I know Trump might want to refute that".
Trump and the White House have not backed away from the claims, despite intelligence community officials saying Monday there was no evidence such a wiretap existed.
"So you shouldn't be talking to me, you should be talking to Fox", he told the reporter. He's refused to back down from his assertion that Obama wiretapped his New York City skyscraper during the campaign, despite there being no evidence. Obama, through a spokesman, denied that he or any White House official ordered surveillance.
National Security Agency director Michael Rogers will also address the hearing later.
Toddler accidentally hangs himself in Minnesota store
A family member has established a gofundme page to help the boy's parents, Denyce G. and Shylo P. The incident remains under investigation, but police do not suspect foul play.
Earlier this month, White House Press Secretary Sean Spicer referred to unsubstantiated allegations made by a Fox News analyst that GCHQ, the British electronic intelligence agency, had helped Obama wiretap Trump.
Panetta suggested Trump should not only back down from his allegation but also say sorry to his predecessor. He says the investigation includes the nature of any links between individuals associated with Trump's campaign and the Russian government, and whether there was any coordination between Russia's efforts and the campaign. "They have peddled stories in the past which turned out to be not true, which were deliberately put out by them, [and] they have produced leaked material to embarrass different United States politicians".
"So if the story comes from RT, it would indeed be part of the fairly standard Russian playbook with which all western democracies at the moment are having to cope".
The House intelligence committee is holding a hearing on Russian interference in the 2016 presidential election.
FBI Director James Comey also confirmed during his hearing that the agency was investigating possible Russian government efforts to interfere in the 2016 US election including any links between President Donald Trump's campaign and Moscow.
The Kremlin has denied that it meddled with the USA elections.