"More clandestine case officers, who are worth their weight in gold, [is] a unique capability that no other part of the intelligence community can render," he said during the panel's hearing on emerging national security threats facing the United States.
The new office under the Pentagon's Defense Intelligence Agency (DIA) is designed to work with its counterparts at the CIA and across the U.S. intelligence community to gather information on national-security threats beyond the battlefield, according to defense officials.
"We have to ... get ourselves more closer to the edge, DIA Director Lt. Gen. Michael Flynn said regarding the DCS during the same hearing
"Frankly the intelligence is better there," he added.
Initially, the primary mission of the DCS will be to home in on potential, long-term threats posed by China, North Korea and Iran while continuing to support the intelligence needs of combat troops in Afghanistan and elsewhere across the globe.
But some outside the Pentagon had expressed concerned the new organization could fall victim to the bureaucratic turf wars that are commonplace in Washington.
As part of their mission, DCS officials will focus on human intelligence collection — known as HUMINT in military and intelligence circles — which has traditionally been the domain of the CIA and other organizations in the intelligence community.
But Clapper quickly dismissed those concerns, noting the DCS mission is simply an extension of the foreign espionage mission the Pentagon has been doing for decades.
The DCS "isn't really a [new agency] as much as it is a reshaping, a recasting" of the Pentagon's existing network of spies under the DIA's human intelligence (HUMINT) service, Clapper said.
As the former head of the intelligence agency, Clapper helped create the Defense HUMINT Service in 1992, he told lawmakers.
Funding for the new DOD intelligence wing was also included in the final Defense Authorization Act for fiscal year 2013 approved by Congress last year, despite initial skepticism by lawmakers on the new office.
But agencies like the clandestine service have become more important in the face of massive, across-the-board budget cuts under the White House's sequestration plan.
As head of the U.S. intelligence community, Clapper shepherded nearly $4 billion in cuts to intelligence coffers in the past seven months to meet the community's share of the reductions due to sequestration.
As a result, intelligence decision makers will be forced to "rethink what [to] expect from the intelligence community, because it isn't going to be the same," Clapper said.
"The degradation to intelligence will be insidious," according to Clapper.
"It will be gradual and almost invisible until, of course, we have an intelligence failure," he added.
Organizations like DCS will be able to fill those intelligence gaps created due to sequestration, Clapper said.
But committee members remained unconvinced the addition of a new intelligence agency will be able to close the blind spots in U.S. intelligence created by sequestration.
"We won't know what we've missed until something blows up?" Sen. Angus KingAngus KingAmazon, Facebook, other large firms would pay more under proposed minimum tax, Warren's office says Senators look to defense bill to move cybersecurity measures Energy information chief blames market for high fuel prices MORE (I-Maine) asked Clapper on sequestration's impact on intelligence.
In response, Clapper replied quickly: "Yes, sir."