* Choice of congressman aimed at energizing conservatives

* Democrats relish battle over Ryan budget

* Announcement to be at USS Wisconsin in Norfolk, Virginia

* Romney kicking off four-state bus tour

By Steve Holland

NORFOLK, Virginia, Aug 11 (Reuters) - Republican presidential candidate Mitt Romney plans to name Congressman Paul Ryan as his vice presidential running mate on Saturday in a move that will bring the debate over how to reduce government spending and debt to the forefront of the race for the White House.

Romney will introduce Ryan at the retired battleship USS Wisconsin - coincidentally named for Ryan's home state - in Norfolk, Virginia, at about 9 a.m. EDT (1300 GMT), according to a Republican official who asked not to be identified.

The announcement will mark the end a months-long search by Romney for a running mate to join him in facing Democratic President Barack Obama and Vice President Joe Biden in the Nov. 6 election.

Romney starts a bus tour on Saturday through four politically divided states that he needs to win in November: Virginia, North Carolina, Florida and Ohio.

His choice of running mate is a bold one and comes after polls this week showed him falling slightly behind Obama in what is still a close race, in a campaign that is focused largely on the weak U.S. economy.

The selection of Ryan, 42, brings a measure of youthful exuberance and energy to the Republican ticket as party activists prepare to gather in Tampa, Florida, late this month for a convention to formally choose Romney as their presidential nominee.

Conservative leaders, increasingly anxious over the state of Romney's campaign, had urged him to pass over reliable - but not particularly inspiring - figures such as Ohio Senator Rob Portman and former Minnesota governor Tim Pawlenty, and instead go for Ryan.

The Wisconsin congressman is a favorite of the conservative Tea Party, an anti-tax, limited-government movement that helped Republicans take over the U.S. House of Representatives in 2010.

But Ryan's selection immediately draws attention to a budget plan he proposed as House budget chairman that would include controversial cuts in government health programs for the elderly and poor.

Democrats are eager to pounce on that issue - particularly in Florida, where many seniors live and which could be a crucial state in the November election. Ryan's selection makes the Florida leg of Romney's bus tour an instant test for the new ticket.


A NEW TARGET FOR DEMOCRATS

Romney's decision to select Ryan suggests he is willing to have a debate over government spending and its role in the daily lives of Americans. He has endorsed parts of Ryan's budget.

"Conservatives are going to be very energized because this is a demonstration that Romney was willing to make a bold pick," said Republican strategist Matt Mankowski. "It may not be what he wanted to do three or six months ago, but I think this is as significant a choice as he could have made."

Bill Burton, senior strategist at the pro-Obama group Priorities USA, indicated that Ryan being on the Republican ticket would open a new avenue of attack for Democrats.

Polls suggest that Obama has been helped this summer by Democrats' efforts to cast Romney as a wealthy former private equity executive who is out of touch with middle-class America.

"If it's really Ryan, Romney will have picked one of the only people who could have had an impact in the race," Burton said in a tweet. "But not the way he wants."

The conservative Weekly Standard magazine reported that the Romney campaign had begun to prepare a vigorous effort to support Ryan as the vice presidential pick.

Often likening Ryan to former president Ronald Reagan, conservatives say the Wisconsin lawmaker's supposed drawbacks as a candidate - mostly stemming from the steep cuts he has proposed in social safety net programs - are actually strengths that could bring heft, content and perhaps a spark to the Romney campaign.

Romney bonded with Ryan during the Wisconsin Republican primary battle last spring, when Ryan campaigned enthusiastically for the former Massachusetts governor.

For Romney, an outsider to Washington, Ryan would provide some expertise in dealing with Congress.

But Ryan, a member of the House for 13 years and a Capitol Hill staffer before that, is a Washington insider without business or executive experience. That is in sharp contrast to Romney, who has been critical of Washington insiders and says his years in private equity as a founder of Bain Capital have given him insight into the needs of U.S. businesses.

That inconsistency on the Republican ticket could be a problem, some analysts said.

Unlike many of his colleagues, who made their names at home and then came to Washington, Ryan got his start as a Hill intern and aide and then went back to Janesville, Wisconsin, to run for office, getting elected to Congress in 1998.

He already had a passionate interest in the budget, joking in 2010 that it was "kind of weird" that he had been "reading federal budgets since I was 22 years old. I know that's kind of sick".


A RAPID RISE

Ryan had begun work on a budget blueprint of his own before Republicans captured the House in the 2010 mid-term elections. But it got little attention from reporters or Republican colleagues, who had little interest in associating themselves with a detailed list of budget cuts.

By the fall of 2010, however, the budget - and the deficit - had become defining issues, thanks in part to the Tea Party movement.

After Republicans took control of the House in January 2010, Ryan became chairman of the House Budget Committee. Suddenly he was one of the Republican Party's most visible and formidable leaders, and a frequent guest on cable news shows and the Republican speaking circuit.

Ryan's budget plan, which passed the Republican-controlled House of Representatives last March despite significant Democratic opposition, aims to cut tax rates while also slowing the rapid growth of the federal debt. It would do so mainly by cutting domestic programs that many Democrats have vowed to protect.

By choosing Ryan, Romney effectively adopts the Ryan budget, which includes proposed cuts to Medicare, the healthcare program for the elderly, long considered to be politically taboo.

Ryan would set up a voucher-like system for the program to help beneficiaries buy private health insurance or give them access to the traditional fee-for-service plan.

Another controversial portion of Ryan's budget is a plan to reduce the cost of Medicaid, the federally backed healthcare plan for the poor, by turning it into a block grant program for states.

Several Democrats have said that among the potential running mates for Romney, Ryan was the one they would most like to face because of his budget proposals.

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