It says the 1973 resolution should be repealed and replaced with new legislation that would require the president to inform congress of any plans to engage in "significant armed conflict", or non-covert operations lasting longer than a week.
In turn, congress would act within 30 days, either approving or disapproving the action.
New proposal would replace the 1973 War Powers Act, which the report calls "ineffective"
Under the current act, if congress does nothing, the president is free to use military force for up to 90 days without congressional approval
The panel recommends the passage of a new law requiring congress to act - to either approve or disapprove a war effort before the president does anything
It also wants the White House and congress to be legally required to continually consult each other over the course of any war effort
Baker, who served as secretary of state in the first Bush administration and co-chaired the 2006 Iraq Study Group, said the proposal was not intended to resolve constitutional disputes between the White House and congress on who should decide whether the nation goes to war.
"What we aim to do with this statute is to create a process that will encourage the two branches to co-operate and consult in a way that is both practical and true to the spirit of the constitution," he said.
A new joint house and senate committee would be established to review the president's justification for war and be granted access to highly classified information.
The panel has briefed the presidential campaigns of Barack Obama and John McCain, as well as congressional leaders.
Tommy Vietor, a spokesman for Obama, said the Democratic candidate commended the panel "for advocating that the president consult congress more closely on issues of critical national importance like the use of military force".
McCain did not provide comment.
Power of purse
Congress' involvement in approving combat operations became a central issue in the Iraq debate last year, when Democrats tried to force George Bush, the president, to end the war.
While congress had authorised combat in Iraq, Democrats said the resolution approved only the invasion and not a five-year stay.
The only sure way for congress to have ended the war is to cut off money for combat operations, but it is a step most Democrats were not willing to take because they feared doing so would have hurt troops in harms' way, or at least be perceived by voters that way.
The new proposal, which the authors say was not triggered by the Iraq war, would not necessarily resolve such issues but may create a consultative process between the White House and congress that currently does not exist.
Also, calling on congress to respond would exert significant political pressure on a president if he ignored legislators' wishes.