Sixteen states currently have "work share programs" that provide unemployment benefits to workers who accept fewer hours in lieu of layoffs. The Department of Labor said these programs have saved 146,000 jobs this year.
Reed's office said as many as 500,000 jobs could be saved this year if the programs had a national sponsor.
"This plan will help prevent layoffs, make businesses more productive, and save taxpayers money by keeping people on payrolls and off unemployment benefits," Reed said in a statement.
A Republican aide in Washington said to some Republicans, the idea sounds like "tax and spend," The Hill newspaper reported Monday.
But the idea has the backing of some economists, including Mark Zandi, chief economist at Moody's Economy.com, and Paul Krugman, a New York Times columnist.
Zandi said the program would have better returns than extending unemployment benefits.
With unemployment at 10.2 percent, President Barack Obama is to announce a job summit meeting in December, The Hill said.