Updated 3:37 p.m. | Director of National Intelligence Director James R. Clapper Jr. had a stern warning for senators Wednesday, noting that the government shutdown creates an ideal recruiting ground for other spy agencies.

“This is a dreamland for foreign intelligence service to recruit, particularly as our employees, already many of whom [are] subject to furloughs driven by sequestration, are going to have, I believe, even greater financial challenges,” Clapper said.

The spy chief said the intelligence community is working to support staff facing financial difficulties because of the shutdown with counseling services.

“I’ve been in the intelligence business for about 50 years. I’ve never seen anything like this,” Clapper said. “From my view, I think this — on top of the sequestration cuts that we’re already taking — that this seriously damages our ability to protect the safety and security of this nation and its citizens.”

Clapper’s comments came in testimony at a previously scheduled hearing on domestic surveillance before the Senate Judiciary Committee, where Chairman Patrick J. Leahy, D-Vt., asked intelligence leaders to address the effects of the shutdown.

“Our nation needs people like this, and the way we treat them is to tell them, ‘You need to go home because we can’t afford to pay you,'” said National Security Agency Director Keith B. Alexander. “From my perspective, it has had a huge impact on morale.”

As a senior appropriator, Leahy noted that the shutdown could have been avoided long ago, through work on regular spending bills.

Judiciary ranking member Charles E. Grassley questioned the legal standard used in deciding which employees were put on furlough.

“I’m concerned that if lawyers in the intelligence community determined that 70 percent of their employees are non-essential to the mission … the number one responsibility of the federal government, then the intelligence community either needs better lawyers to make big changes to the workforce or are you over-employed in those areas?” the Iowa Republican asked.

“The legal standard against which we make decisions about who is furloughed and who isn’t is, and this is quoting from the law, is that which is necessary to protect against imminent threat, eminent threat to life or property,” Clapper explained in his testimony. “So, our applying that standard is what resulted across-the-board in furloughing roughly 70 percent. I think that will change as this, if this drags on, and we will make adjustments depending on what we see as the potential imminent threats to life or property.”

Later in the hearing, Sen. Lindsey Graham highlighted the fact this is the first such shutdown since the terrorist attacks of Sept. 11, 2001.

“You scared the hell out of all of us,” the South Carolina Republican told Clapper and Alexander.

“The government shutdown in a post-9/11 world is making this nation less safe,” Graham said, criticizing President Barack Obama and Congressional leaders in both parties for not working to reach a deal to get the government back fully operational.

Graham’s comments came just as the White House announced a late-afternoon meeting between Obama and House and Senate leaders.

Update 3:37 p.m.

Senate Democrats are now using Clapper’s remarks as a key talking point.

No. 2 Senate Democrat Richard J. Durbin of Illinois mentioned Clapper’s statement specifically during a news conference Wednesday and Sen. Charles E. Schumer raised the specter of a potential attack with a scrum of reporters after the conference was over.

“Seventy-five percent of all intelligence employees are not working. That jeopardizes our security. God forbid something terrible happens. Then what will people say? And, you know, something terrible could happen six months from now, but with three quarters of the people not working, they could have missed a vital sign today,” the New York Democrat said.

Sen. Ted Cruz, R-Texas, suggested a stopgap spending bill for intelligence and related programs during the hearing.

“If the Senate cooperates, we could get this passed by the end of the day. We could respond to the national security threat,” Cruz said. “And the only impediment to doing so is the prospect that Majority Leader Harry Reid would object to doing so. If God forbid we see an attack on the United States because the intelligence community was not adequately funded, every member of the committee would be horrified.”

Meredith Shiner contributed to this report.