The Gravity Recovery and Climate Experiment (GRACE) has ushered in a new era for satellite measurements of the Earth system. GRACE provides monthly estimates of the time-varying gravity field, which are largely due to the redistribution of water mass in the Earth system, with a spatial resolution of ~500 km and an accuracy of 1 cm equivalent water. This is accomplished via a suite of instruments including a microwave ranging system, precision accelerometers for measuring non-gravitational forces, and a GPS navigation system. The tremendous advances made by GRACE have led to an interest in launching a follow-on mission with even better performance. Improving the ranging performance, implementing a drag-free control system, and flying at a lower altitude can improve the spatial resolution. This presentation will describe our work towards proving an interferometric laser ranging system that we expect to perform near the 1 nm/sqrt(Hz) level or better from 10 to 100 mHz, which when coupled with other mission improvements, would improve the spatial resolution to ~100 km for 1 cm water equivalent accuracy. We will present our strawman design for the laser ranging system and a preliminary error budget. We will discuss the breadboard tests underway and our plans to build an engineering model of the instrument and demonstrate its accuracy in the laboratory over the next few years.