The extent of the damage done by the massive hack into personnel records of American government workers by the Chinese is just now coming into focus.  By many accounts, the injury done to our national security is far more extensive than originally believed.

The key for the hackers is when they penetrated the system used to vet employees for sensitive work.  The hackers apparently have access to millions of forms used to perform background checks on employees, leaving them open to blackmail and other methods of pressure by foreign intel services.  Our counterintelligence efforts have been set back a decade or more, according to John Schindler in the Daily Beast:

But there's an even more serious aspect of this compromise: the threat it poses to American intelligence operations abroad, particularly to officers serving under various false identities, or "covers," overseas. The Intelligence Community employs myriad cover mechanisms to protect the true identity of its spies posted outside the United States. Cover protects our officers and allows them to conduct their secret work without drawing as much attention to themselves. While many intelligence officers pose as diplomats, that is only one option, and some covers are deeper than others.

Regardless, all espionage covers are based upon credible narratives that rely on plausible details. Through a process the Intelligence Community calls back-stopping, any officer’s cover needs to look real and check out if tested. Thus, an American spy who is posing as an oil executive, for instance, has to have a “legend” in that industry that bears that out. Think business cards, company websites, or a team of ersatz oil industry colleagues. Just as another intelligence officer who poses as a diplomat better have his or records in State Department systems, to look plausible.

Any cover is only as good as its back-stopping, which will be paper-thin if a foreign intelligence service can determine that American spies operating under covers, both official and non-official, are not who they claim to be. “Spot the spook” used to be a difficult and time-consuming activity for hostile intelligence services. The OPM hack promises to make it fast and easy. The hackers now have access to information on literally millions of people. That makes it much easier to verify who is really who, and which agency they’re really in the employ of.

For American intelligence officers overseas using deep covers, this may be a matter of life and death.  While the CIA and NSA use in-house vetting departments, avoiding the OPM, many intelligence agents use as a cover employment with another government agency.  That information is probably in the OPM files that werre hacked, making life very dangerous for those individuals.

The one-two punch of Snowden and this hack will have the CIA scrambling for a very long time:

The OPM breach on the heels of Snowden represents a one-two punch that has hurt American espionage far worse than Agee ever could. Compromises this great will take many years to repair, and for some officers whose covers get blown because of this, operations and careers may be seriously harmed. The unlucky ones, like Richard Welch in Athens, may be at risk of things much worse than a curtailed assignment.

Human intelligence, or "HUMINT," has become a smaller and smaller part of our intel gathering.  Extremely effective, technologically advanced satellites and other surveillance equipment have replaced people in recent decades.  But there are some things that you need HUMINT for.  Our abilities in that sphere have been horribly compromised, with untold damage to our ability to protect ourselves.