WASHINGTON - The Obama administration is proposing a new rule to tighten restrictions on pollution from coal-burning power plants in the eastern half of the country, a key step to cut emissions that cause smog.

The Environmental Protection Agency said Tuesday the new rule represented its most consequential effort yet to tackle deadly pollution that contributes to smog and soot that hangs over more than half the country. The rule would cost nearly $3 billion a year and those costs are likely to be passed along to consumers, although the rule's effect on specific companies and on consumers was not clear.

"We believe that today is marking a large and important step in EPA's effort to protect public health," said the agency's top air pollution official, Gina McCarthy.

The rule, to be finalized next year, aims to cut sulfur dioxide emissions by 71 percent from 2005 levels by 2014 and nitrogen oxide emissions by 52 percent in the same time frame.

Known as the Clean Air Interstate Rule, the measure requires 31 states from Massachusetts to Texas to reduce smog and soot-producing emissions that can travel long distances in the wind. The agency predicted the rule would prevent about 14,000 to 36,000 premature deaths a year.

The rule would overturn and toughen rules issued during the administration of former President George W. Bush.

While environmental groups and some Democratic lawmakers hailed the new regulation, they conceded that the complicated measure is open to industry lawsuits that could cause delays in meeting public health targets.

Sen. Tom Carper, D-Del., said the likelihood of litigation underscores the need for Congress to pass strong air pollution legislation this year.

With a comprehensive energy bill facing united GOP opposition in the Senate, Democrats are considering an approach that would focus on capping greenhouse gas emissions from power plants. Some White House officials have begun to speak favorably about such a "utility-only" bill, which could be more attractive to Republicans.

Frank O'Donnell, chairman of Clean Air Watch, an environmental advocacy group, cautioned Democrats not to sacrifice the interstate pollution rule to win votes for a climate bill.

"It would be absolutely foolish to trade away vital public health protections (in the clean-air rule) in return for a weak climate bill," he said. "We think that would be disastrous."

A federal judge threw out the Bush clean-air rule in 2008, but an appeals court later reinstated it, while ordering the EPA to make changes that better explain how the rule protects public health.

More than a dozen states, along with environmental groups, sued the EPA several years ago, contending that the Bush administration ignored science and its own experts when it decided in 2006 not to lower the nearly decade-old soot standard.

EPA Administrator Lisa Jackson said the rule signed Tuesday should improve air quality and public health in a broad swath of states, from southern New England down to Florida, over to Texas and up to Minnesota. The rule does not affect four New England states: Rhode Island, Vermont, New Hampshire and Maine.

"We're working to limit pollution at its source, rather than waiting for it to move across the country," Jackson said in a statement.

The proposed reductions should save more than $120 billion a year in avoided health costs and sick days and save thousands of lives each year, Jackson said. Those benefits would far outweigh the estimated $2.8 billion annual cost of compliance, she said.