An announcement was expected as early as Friday, according to officials and lawmakers briefed on the matter.
The proposal would temporarily lift a requirement that U.S. passports be used for air travel to and from Canada, Mexico, the Caribbean and Bermuda, several lawmakers said Thursday.
The suspension would allow the State Department to catch up with a massive surge in applications that has overwhelmed passport processing centers since the rule took effect this year. The resulting backlog has caused up to three-month delays for passports and ruined or delayed the travel plans of thousands of Americans.
A senior administration official said, "everyone agrees there is a problem with the huge backlog of passport applications," reports CBS News State Department correspondent Charlie Wolfson.
Under the proposal, travelers would have to present a State Department receipt, showing they had applied for a passport, and government-issued identification, such as a driver's license.
Those without passports would receive additional security scrutiny, which could include extra questioning or bag checks, according to one official familiar with the discussions.
Republican Rep. Heather Wilson said the suspension would last until the end of September.
Homeland Security signed off on the proposal Thursday after consultations with the State Department, the White House and members of Congress, who have been deluged with calls from angry constituents seeking help with their passports.
Rep. Thomas Reynolds, a Republican whose New York state district lies near the Canadian border, said White House officials had been in Congress trying to work out a compromise amid what he called a "turf war" between State and Homeland Security.
"White House personnel have seen the problem and they've been on Capitol Hill working with members," Reynolds said.
The department had been weighing whether the proposal would make it easier for terrorists or other undesirables to enter the country, officials involved said.
But several lawmakers had been pushing for a change for weeks.
"To say people must have a passport to travel and not give people a passport is right up there in the stupid column," said Wilson, who first urged the State Department to lift the rule last month.
The application surge is the result of the Western Hemisphere Travel Initiative that since January has required U.S. citizens to use passports when entering the United States from Canada, Mexico and the Caribbean by air. It is part of a broader package of immigration rules enacted after the Sept. 11, 2001, terrorist attacks.
Between March and May, the department issued more than 4.5 million passports. It has millions more to process, according to consular affairs officials.