Transferring aid money to Sudan was put forward on Wednesday as the Bush administration came under fire by senators who were upset that only $1 billion of the over $18 billion designated for Iraq had actually been spent.
It would be the first time unused money earmarked for Iraq is used to help another country.
Mounting violence in Iraq has set back reconstruction and the Bush administration has asked Congress to divert money from rebuilding to improve Iraq's security.
The Senate Appropriations Committee added the Sudan measure to a $19.4 billion foreign aid bill for the fiscal year starting on 1 October. The bill is $2 billion below Bush's request.
The United Nations says up to 10,000 people are dying each month in the Darfur region of Sudan from disease and violence in camps for those displaced in fighting.
US senators have said the world's
response in Sudan is inadequate
"A humanitarian crisis is unfolding before our eyes, and the world's response is inadequate to the scope of this tragedy," said Senator Patrick Leahy, a Democrat from Vermont.
The overall Senate bill has a total of $569 million for Sudan and a separate agricultural bill has another $200 million.
The foreign aid bill would let Bush move those funds, including $360 million in debt relief for Iraq which would pave the way for a 95% write-off of Baghdad's $4 billion debt to the US.
Speed up reconstruction
In an unusually non-partisan hearing, Republican and Democratic senators urged senior State Department officials to try harder to speed up the reconstruction programme, which lawmakers said could lead to a more stable environment in Iraq.
They also told officials to be honest in their assessments of what was going on, with Indiana Republican Senator Dick Lugar taking aim at those who painted an overly positive picture.
"There is such a disconnect between what I hear [from Bush administration officials] and the reality of the situation on the ground"
"The nonsense of all of that is apparent. The lack of planning [for Iraq] is apparent," said Lugar, chair of the Senate Committee on Foreign Relations.
The committee's top Democrat, Senator Joseph Biden of Delaware, said virtually every problem in Iraq was predicted by experts before the US invasion, but no plan was in place.
"The ideologues were in control and in denial," Biden said. "There is such a disconnect between what I hear [from Bush administration officials] and the reality of the situation on
"This is an extraordinarily ineffective administrative procedure and it is exasperating for anybody looking at this from any vantage point," Lugar said.
The State Department's Iraq Coordinator, Ronald Schlicher, conceded it had taken too long, but said there was progress.
"As you rightly point out, this is still too low. We need to keep pressing ahead on disbursement," he said.
The State Department took over charge of Iraq's reconstruction from the Pentagon after the handover of sovereignty to the interim Iraqi government from the US authority on 28 June.
The Pentagon's rebuilding plan focused on big-ticket contracts handed out mostly to a handful of US companies, a strategy the State Department is moving away from in favour of more short-term projects that show quicker results.