American intelligence agencies are "in a much better position" to track potential national security threats now than they were before the Sept. 11, 2001, terrorist attacks, Clapper said during a speech at the Intelligence and National Security Alliance's conference in Washington.
Intelligence agencies have not been exempted from the draconian budget cuts to defense and national security coffers under the sequestration plan.
The Defense Department alone is facing more than $500 billion in budget cuts over the next decade.
But unlike the Pentagon and other government agencies, "the impacts of [sequestration] may not be known for some time" within the CIA, National Security Agency and other U.S. intelligence organizations, Clapper said.
Those effects, he added, will not become clear "until there is a failure" in the form of a terrorist attack against the United States or its allies across the globe.
"You do not take those kinds of cuts" without a loss in capabilities, Clapper warned.
"We are, in some areas, going to take higher risks ... [and] we should not sugar-coat that," the intelligence chief added.
Those additional risks come as leaks of classified information from Snowden continue to compromise current and future intelligence operations.
Along with disclosing details of the NSA's domestic intelligence programs, recent Snowden leaks included details of the intelligence community's classified annual "black budget" to The Washington Post.
The budget disclosure included specifics on ongoing intelligence programs, along with assessments of U.S. adversaries, such as North Korea and Iran.
"Unfortunately there is more to come," Clapper said Thursday.
The additional leaks from the classified information obtained by Snowden during his time with the NSA will likely compromise sources and methods used in American intelligence operations, according to Clapper.
Clapper did admit the Snowden leaks, and the privacy debates the leaks sparked, "needed to happen" within the intelligence community.
That said, transparency on intelligence operations is "a double-edged sword" Clapper said, but added U.S. intelligence officials needed to "err on the side of transparency" to keep the faith of American citizens.
Keeping that faith has been a struggle as Clapper and the rest of the administration's national security team make the case for military action in Syria.
To that end, there have been "huge improvements" in intelligence collection and analysis since the CIA and other agencies made the case for war in Iraq, Clapper said.
Those improvements, he added, have added an increased level of certainty within the intelligence community on Syria's use of chemical weapons.
U.S. forces in the Mediterranean are awaiting orders from the White House to begin targeted strikes against forces loyal to Syrian President Bashar Assad.
The strikes are in retaliation for the Assad regime's alleged use of chemical weapons against anti-government rebels in the country.
U.S. intelligence analysts found that Assad's forces launched large-scale chemical weapons attacks against rebel positions around the capital city of Damascus in late August.
Intelligence officials have spent the past several weeks briefing congressional lawmakers on the attacks as part of President Obama's effort to secure legislative authority to begin strikes in Syria.
However, the Obama administration has delayed the strikes as American diplomats hammer out the details of an eleventh hour proposal by Russia to end the U.S. standoff.
Administration officials are vetting the Russian plan, which would force Assad to give up control of his chemical weapons stocks to the United Nations.
Secretary of State John Kerry traveled to Geneva on Thursday to meet with Russian Foreign Minister Sergey Lavrov to discuss details of the plan.
Despite those ongoing diplomatic efforts, the Defense Department is not considering standing down American forces in the region, Pentagon press secretary George Little said Thursday.
"We need to see how the Geneva discussions proceed" before any withdrawal plans can be considered, he added.