The bipartisan legislation - Terrorism Expatriation Act -- would also allow the State Department to revoke the citizenship of people who provide support to terrorist groups like Al-Qaeda.
"Under the terrorist expatriation act, the State Department would be able to revoke the citizenship of an American who affiliates with a foreign terrorist organisation or who fights against our country," Senator Joe Lieberman told a press conference at the Capitol Hill on Thursday.
Foreign terrorist organisations are also designated according to statute by the US State Department.
The legislation is being introduced in the context of the arrest of Faisal Shahzad, Pakistani-American, who has been charged of terrorist activities and plotting to explode a bomb at the Times Square last Saturday.
Identical bills were introduced in both the House of Representatives and the Senate.
However, Lieberman said the legislation, when finally becomes a law, could not be applicable to Shahzad.
"This proposal if adopted cannot apply to Faisal Shahzad because that would be the retroactive application of a law, which would not be appropriate or constitutional," he said.
Chairman of the Homeland Security Committee Lieberman said Shahzad is just the latest in a growing and accelerating line of cases where American citizens have supported or fought for al-Qaeda or affiliated terrorist organisations against the United States.
"The facts are now clear. Over the past several years, the threat from Islamist terrorist organisations like Al-Qaeda has changed. On 9/11, 19 terrorist who were trained abroad were sent here to carry out their attacks on America.
Now, with increasing frequency, American citizens like Nidal Hasan, the Fort Hood -- the alleged Fort Hood killer of 13, Abdulhakim Mohammad, who killed a US Army recruiter in Little Rock last June, and Faisal Shahzad, the accused Times Square terrorist, are inspired or recruited by violent," he noted.
Once the law is passed, if an American citizen travelled to Somalia to train and fight for the terrorist group al-Shabab, the State Department will have the authority to begin proceedings to revoke their citizenship so that they cannot return here on their passports to carry out an attack against Americans, Liberman said.
"If in some way they do and are then captured, they will not enjoy the rights and privileges of American citizenship in the legal proceedings against them. That, I think, will make America safer," Lieberman said.
"The law would also make it easier to pursue and prosecute individuals like Adam Gadahn, the aforementioned al Qaeda-American spokesman, by military commission. Gadahn famously destroyed his US passport in a jihadist recruiting video in what was obviously an indication that he wanted to renounce his citizenship.
This bill only updates an existing statute that has been on the books for 70 years to account for the terrorist enemy that the US is fighting today.
Senator Scott Brown said al Qaeda and foreign terrorist organizations have a long-standing strategy to recruit US citizens, and to train them in a foreign country, and then send them back to kill Americans and anyone visiting our country.
