The Bush administration's plans to divert $3.46 billion in Iraq (search) reconstruction funds for security could increase dangers in the long run, the Republican chairman of the Senate Foreign Relations Committee said Wednesday.

Sen. Richard Lugar (search), R-Ind., also said the slow pace of spending on reconstruction "means that we are failing to fully take advantage of one of our most potent tools to influence the direction of Iraq."

State Department officials appeared before Lugar's panel seeking lawmakers' support for the shift of funds, which needs congressional approval. The proposal would cover almost of a fifth of the $18.4 billion approved by Congress last year, mostly for water, electricity and other public works projects. The money was part of an $87 billion package for operations in Iraq and Afghanistan.

The request comes as heavy fighting continues between U.S.-led forces and a variety of Iraqi insurgents. The violence and bureaucratic delays have slowed spending of reconstruction funds. Lugar said only $1.14 billion has been spent as of Sept. 8, almost a year after it had been approved by Congress.

Lugar said the reconstruction spending is important for winning the support of Iraqis. Efforts to improve security should be aimed at allowing the projects to proceed, he said.

"If the shift of these funds slows down reconstruction, security may suffer in the long run. In short, security and reconstruction must be achieved simultaneously," he said.

Sen. Chuck Hagel, R-Neb., described the request as "an acknowledgment that we are in deep trouble."

Democrats and Republicans said the request demonstrates the administration's poor planning for the war and its unrealistic optimism that U.S. forces would be greeted as liberators and that Iraqis could pay for their own reconstruction.

Lugar criticized "the blindly optimistic people" inside and outside the administration. "The lack of planning is apparent," he said.

Sen. Joseph Biden of Delaware, the panel's top Democrat, said "It's incompetence, from my perspective, looking at this."

Rand Beers, a national security adviser to Democratic presidential candidate John Kerry, said Tuesday that "belatedly moving money from reconstruction to security is necessary but won't make up for George Bush's massive failure to plan for the peace in Iraq."

Under the State Department's proposal, spending for police, border patrols and other security measures would be boosted by $1.8 billion to a total of $5 billion. There would be 45,000 more police, 16,000 more border patrol guards and 20 additional National Guard (search) battalions.

Water and sewer programs which would shrink from more than $4.2 billion to more than $1.9 billion, and electricity, would be reduced by more than $1 billion from $5.47 billion.