The Senate Budget Committee approved a fiscal 2011 budget that would lower the deficit to 3 percent of gross domestic product in five years.
Drafted by Senate Budget Chairman Kent Conrad, the budget resolution was approved Thursday on a party line, 12-10 vote.
"A budget is about setting priorities and this plan does so," Conrad said.
By fiscal 2015, the plan would decrease deficits to $545 billion, about 3 percent of GDP, from $1.4 trillion in fiscal year 2010. Conrad has criticized President Barack Obama's 10-year budget plan for not getting the deficit below 4 percent of GDP.
Conrad's budget plan provides for two years of relief for the alternative minimum tax and for two years of estate tax reform, reflecting the 2009 estate tax levels. Conrad has said these budget provisions is what gets the budget blueprint to the desired deficit numbers within the budget window. After two years, Conrad assumes the taxes will either be paid for or resolved through tax reform.
The budget blueprint freezes non-security discretionary spending for three years and enforces those levels with spending caps. It also cuts discretionary spending by $4 billion from the White House's budget request of $1.128 trillion. The cuts come from the State Department and international programs, Conrad said.
A final decision on making those cuts would be up to the Appropriations committees.
Sen. Judd Gregg (R-N.H.), the panel's ranking Republican said a $4 billion cut in discretionary spending does little to solve the nation's massive fiscal issues. He further criticized the resolution for failing to address the long-term problems, specifically on entitlement spending such as Medicare, Medicaid and Social Security.
Conrad's budget also includes $780 billion in tax relief that would be targeted at the middle class by extending Bush-era tax cuts.
In addition, appropriations will have to reduce their funding levels by $5.5 billion to cover a shortfall in Pell Grant funding because Congress decided not to completely pay for the school grants from mandatory spending, Conrad said.
Reconciliation instructions included in the budget resolution would allow the Senate Finance Committee to move "jobs" legislation through the Senate with a simple majority rather than 60 votes. The instructions call for the Finance panel to cut the deficit by $2 billion.
The budget could hit the Senate floor after the chamber deals with a financial regulatory reform bill that is set for a cloture vote on Monday evening.