U.S. Secretary of Defense Chuck Hagel warned Wednesday that North Korea has come very close to a "dangerous line" with its sharp statements iand provocative steps.

"North Korea has been, with its bellicose rhetoric, its actions, has been skating very close to a dangerous line," he said during a press conference at the Pentagon. "Their actions and words have not helped defuse a combustible situation."

He emphasized that North Korea's threats should be ratcheted down and its actions "neutralized."

Hagel met with media mainly to discuss the department's budget plans for next year. But the first question from reporters was about the North Korean crisis.

Hagel noted North Korea's young leader, Kim Jong-un, is unpredictable amid reports that the communist nation may soon launch a ballistic missile with a range of 3,000-4,000 kilometers from a mobile launcher on the east coast.

Some suggest the North may also be getting ready to fire other types of missiles into the Pacific.

In the event that Pyongyang remains recalcitrant, the U.S. is fully prepared to take any contingency measures, added the Pentagon boss.

"The reality is that he (Kim) is unpredictable. That country is unpredictable. If that is the reality that we're dealing with, and it is, you prepare for every contingency," Hagel said.

Sitting next to Hagel, Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, would not provide a detailed assessment of whether Pyongyang has mastered a technology to mount a nuclear bomb onto a missile.

"The proximity of the North Koreans to achieving a miniaturization of a nuclear device on a ballistic missile is really a classified matter," he said.

The general, however, said the North conducted three nuclear tests and conducted several successful ballistic missile launches.

"In the absence of concrete evidence to the contrary, we have to assume the worst case. And that's why we're postured as we are today," he said.

The Pentagon requested a $526.6 billion budget for 2014, which will lead to the consolidation of bases, program reductions and restructuring of the civilian workforce among a set of measures to cut spending.

Hagel described the measure as "changing the way we do business and reducing support costs."

He made clear that his department's initiative to reach out to Asia won't be swayed.

"This budget also increases the Defense Department's investments in its cyber workforce, continues to implement our rebalance to Asia and makes new investments in the flexible platforms needed for the future," he said.

The Pentagon will also bolster sea-based missile defense systems to counter North Korean threats.

The U.S. has around 28,500 soldiers in South Korea.

It remains unclear how the Pentagon's spending cut efforts will affect their operations.

The South Korean people are concerned that they will have to shoulder more of the financial burden of stationing American troops. The allies plan to begin a new round of talks later this year on sharing the costs. (Yonhap News)