"That's part of the uncertainty" clouding efforts by Defense Department leaders, who are pressing ahead with worst-case budget scenarios due to the across-the-board cuts, he told reporters at the Pentagon.
Under sequestration, the Pentagon is staring down $500 billion in mandatory spending cuts. The cuts began in March and would reduce Pentagon spending by $52 billion next year.
That said, Hagel and the department "will continue to provide our best and most honest assessment as Congress works to establish the nation's long-term spending priorities," he said.
"DOD has a responsibility to give America's elected leaders and the American people a clear-eyed assessment of what our military can and cannot do" if sequestration becomes the Pentagon's new long-term reality.
White House press secretary Jay Carney expressed a more optimistic view of lawmakers' ability to come up with a sequester fix.
"There's ample opportunity here to craft a budget agreement that rewards the interests of both parties, especially their shared interests, and does it in a way ... that gives our economy a boost instead of a kick in the shins," Carney said Thursday during his daily press briefing at the White House.
Wednesday's bipartisan deal that reopened the government and raised the debt ceiling has created an opening for Congress to finalize a long-term sequestration fix.
"There's an opportunity here, and the president hopes that Congress ... will seize that opportunity," Carney said.
But after months of harsh warnings and dire predictions on the on the devastating effects of sequestration by the White House and Pentagon, Congress is still no closer to a deal, Pentagon Comptroller Bob Hale said Thursday.
"We understand that there will be [budget] negotiations ... but I do not think there is any one thing we can do" to convince lawmakers on the harm sequester will do to U.S. national security that has not already been done.
"But we stand ready to assist [Congress], through the administration ... and help the negotiators in any way we can," according to Hale.
"We want them to succeed," he added.
Earlier this month, House Armed Services Committee member Randy ForbesJames (Randy) Randy ForbesDaschle Group hires first GOP lobbyist Overnight Defense: US sanctions NATO ally Turkey over Russian defense system | Veterans groups, top Democrats call for Wilkie's resignation | Gingrich, other Trump loyalists named to Pentagon board Gingrich, other Trump loyalists named to Pentagon advisory panel MORE (R-Va.) requested the Pentagon provide a classified briefing on the potential national security risks facing the United States due to sequestration.
In a letter to Speaker John BoehnerJohn Andrew BoehnerFeehery: The next Republican wave is coming Rift widens between business groups and House GOP Juan Williams: Pelosi shows her power MORE (R-Ohio) and Minority Leader Nancy Pelosi (D-Calif.), Forbes said the classified briefing would inform "members of this body ... [on] the full impact that cuts to our national defense will have on the security" of the United States.
"If the raw facts about the imminent and dangerous fissures in our nation’s ability to protect its citizens did not create pause in members of Congress, I’m not sure what would," Forbes told The Hill at the time.