Republicans in the House of Representatives have proposed a 2012 fiscal budget that is 4.6 percent smaller than President Barack Obama did in Mid-February.
The proposal unveiled on Tuesday would spend $3.559 trillion, compared with Obama's proposed $3.729 trillion proposal, a difference of $170 billion.
The deficit in 2012 under the Republican plan would be $995 billion.
Over the span of a decade, the plan says it will reduce the federal budget deficit by a total of $4.4 trillion, compared with the Obama proposal of $1.1 trillion.
The budget proposal comes House Republicans and Senate Democrats negotiate a budget for the remainder of the 2011 fiscal year. While Republicans had proposed a budget $61 billion smaller than President Barack Obama's request, Democrats have been saying that the working target is a proposal of $33 billion less than Obama's proposal.
Lawmakers have until April 8 to pass a deal before a partial shutdown of the federal government rakes place.
The savings proposals are numerous, and include reforming agricultural subsidies, shrinking the federal work force through a sensible attrition policy, and accepting Defense Secretary Robert Gates's plan to target inefficiencies at the Pentagon, House Budget Committee Chairman Paul Ryan said in a column published in the Wall Street Journal on Tuesday.
The program also sets the amount the government should pay for the Medicaid program - which provides health insurance to low income people - by establishing what are called block grants. Under the current system the Medicaid program pays a fixed share of a state's Medicaid costs.
Ryan says such an arrangement lets states create a range of options. Similar changes would be made to the food stamp program.
The Medicare program for seniors would also change. Those older than 55 would keep the program as is, but those under that age would be given government subsidies to pay for health insurance.
A Medicare-premium support payment would be paid, by Medicare, to the plan chosen by the beneficiary, subsidizing its cost, Ryan said. The program will also boost help for lower-income individuals or those with greater health risks.
The Republican proposal forces policy makers to work together to enact common-sense reforms, he said.
The budget will also enforce spending caps by eliminating some tax loopholes and broaden the tax base as it lowers the top individual and corporate tax rate to 25 percent.