Eric Holder Sounds the Sequester Alarm

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"We will try to minimize the harm, but the potential is there and the reality is that this Justice Department will not be as capable as it is right now if this sequestration goes into effect and if it lasts for an extended period of time," Holder said.

The 2011 Budget Control Act, which mandates sequestration in lieu of a broad deficit-reduction agreement, requires even cuts across the board. According to the Office of Management and Budget, that means even cuts to federal programs, leaving agencies mostly unable to rearrange money and cut their budgets in less harmful places.

"Every component is going to have people who are going to be furloughed," Holder told ABC News, noting that preventing terrorism will be "obviously our first priority, to make sure that we keep the American people safe and free from threats from outside our borders. We'll do the best that we possibly can."

Read More: Eric Holder Remembers Newtown, His Worst Day on the Job

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