Levin, chairman of the Senate Armed Service Committee, said the government needs the tools to fight against outside agents trying to target U.S. businesses and innovation.
"Some foreign governments, businesses and state-owned enterprises are today using cyber espionage to steal American intellectual property and rob U.S. ingenuity and innovation in order to gain competitive advantage," McCain said.
A report this week from the U.S. Defense Department accused China of using computer-based espionage against U.S. interests. China, through its official Xinhua News Agency, said the allegations were baseless.
A February report from cybersecurity company Mandiant said cyberattacks on U.S. companies and government agencies were traced to the Chinese military.
The measure, if passed, would require the director of National Intelligence to compile a list of countries engaged in computer espionage against the United States. The president could then sanction such entities.