[EDITOR’s NOTE: This story was updated at 1:50 p.m. on March 2, 2012]

Former Defense Secretary Robert Gates delivered a ringing endorsement to California’s citizen-led redistricting effort, saying in a March 2 speech in Santa Barbara that extreme forces on the political left and right must learn to compromise if America is going to get its fiscal house in order.

“We have the power and means to overcome” the economic and security challenges of the 21st century, Gates told about 700 business and community leaders the annual Westmont College President’s Breakfast. But he said putting sustainable policies into place will require the kind of “courage and unity” that was the hallmark an earlier era when compromise was a viable political option.

“In order to get America’s finances in order, the political class much show leadership,” said Gates, who began his talk by looking back to the early 1990s when a budget compromise between the Democratic leadership in Congress and the administration of George H.W. Bush helped set the stage for a decade of growth. “Compromise has become a dirty word,” he said.

He said that efforts such as citizen-led redistricting are going to create more competitive races for the House of Representatives, forcing candidates to move to centrist positions on key issues. Today’s environment, he said, depends too heavily on elections where the victors “impose their agenda by brute force.”

In his first major public speech since taking over as chancellor at his alma mater, the College of William and Mary, at the end of February, Gates said that a consistent U.S. foreign policy framed the approach to the Cold War for nine presidential administrations, something that’s easy to overlook in the current hyper-partisan political environment. He said today’s leaders are all to eager to overlook longer-term goals for short-term gains.

Gates, a former CIA director and former president of Texas A&M University, painted a grim picture of the challenges facing U.S. military leaders in the coming decade. A resurgent China has turned to nationalism and military buildup to quiet a restless middle class. In Russia, resentment over the economic failures after the collapse of the Soviet Union runs high.

And he warned that the stirrings of democracy in the wake of the Arab spring are not guaranteed to produce open societies governed by the rule of law. Elections results in Egypt, for example, where the Muslim Brotherhood won a clear victory over moderates, “are not encouraging,” he said.

Gates, who succeeded retired Supreme Court Justice Sandra Day O’Connor at William and Mary, said the U.S. role in Afghanistan, now winding down, suffered because of the distraction of the Iraq war. He said that while Pakistan is a frustrating ally the U.S. has no choice but to stay in the relationship and try to persuade Pakistani leaders that the security threat from the Taliban is greater than the threat from longtime rival India.

He said that while a nuclear-armed Iran would pose a dire security threat in the Middle East, a military strike poses problems of its own. “We could set back their nuclear program by two to three years, but they could dramatically worsen the situation in Iraq or Lebanon,” he said, adding that recent harsh sanctions on the regime are “starting to bite.”

Thanks to its budget compromise and the collapse of the Soviet Union, in 1993, America was “an economic and military colossus” that was poised for a decade of economic growth, Gates said. He said that America’s “moment in the sun” also sewed some of the seeds for the difficult decade to come.

He said that the killing of Osama Bin Laden has not totally disabled Al Qaeda and that the U.S. has little choice but to fight global terrorism “on their 10-yard line and not on our goal line.”

He took aim at the fragmentation of the American media, suggesting that the growing force of bloggers and commentary where “more vitriol equals more attention” discourages the debate-and-compromise model that heralded America’s rise to global superpower status.

He suggested that slashing military expenditures as the U.S. did after the Vietnam War and the first Gulf War might not be the best long-term strategy for confronting a resurgent China, the challenge of dealing with Iran and a reduced by persistent threat from terrorist groups.