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The bill aims to strip Pakistan of all American foreign aid until Afridi's recent 33-year prison sentence is overturned and he is allowed to leave Pakistan.
Another bill introduced by Paul seeks to grant Afridi United States citizenship for his efforts.
"Pakistan must understand that they are choosing the wrong side. They accuse Dr Afridi of working against Pakistan, but he was simply helping the US capture the head of Al Qaeda.
"Surely Pakistan is not linking their interests with those of an international terrorist organisation. Foreign aid has been an abysmal failure precisely for this reason -- we give the aid to governments who then turn and work against our national interest. That must end," Paul said on Tuesday.
Last week, Paul wrote a letter to US President Barack Obama, urging a delay in the release of foreign military financing to the government of Pakistan, and to hold all aid until Afridi, the informant who assisted intelligence services in identifying the whereabouts of Osama bin Laden, is released.
"Until Dr Afridi is released from prison, we urge you to withhold all unallocated foreign assistance money for Pakistan remaining for this fiscal year. We must send a message not only to Pakistan but to any other countries seeking to use American taxpayer dollars to subsidize their subversion of America's global priorities," Paul said in his letter to Obama.