The Ryan plan contains another element popular

Safe-haven Treasuries gave up most initial gains, however, as Wall Street trimmed some of its losses in the afternoon. Meanwhile,burberry ties the dollar rose broadly as growth-related currencies were pressured by Chinese worries.

Concerns about the scale of China's economic slowdown resurfaced as BHP Billiton (BHP.AX), the world's largest miner, said it was seeing signs of "flattening" iron ore demand from the country.

U.S. stock indexes finished lower as investors took some profits after a rally on Monday drove the S&P 500 index to a level less than 10 percent shy of its 2007 record high.

"Do I think we are due for a pullback? Yes. Do I think this is the start of a pullback? No," said Mike Shea, managing partner and trader at Direct Access Partners in New York.

"The news out of China caused everyone to look up and take a breath, but the sentiment hasn't changed. It's still bullish."

The Dow Jones industrial average .DJI ended down 68.94 points, or 0.52 percent, at 13,170.19, while the Standard & Poor's 500 Index .SPX lost 4.23 points, or 0.30 percent, to 1,405.52. The Nasdaq Composite Index .IXIC fell 4.17 points, or 0.14 percent, to 3,074.15.

The S&P 500 has gained more than 11 percent so far this year as a steady flow of strong U.S. economic data encouraged stock investors. Tuesday's U.S. housing data was mixed, however, with housing starts falling in February while permits for future construction jumped to their highest since October 2008.

World stocks measured by the MSCI All-Country World Index .MIWD00000PUS dropped 0.7 percent, after closing on Monday near levels last seen in late July.

In Europe, the FTSEurofirst 300 index .FTEU3 closed down 1.1 percent as autos and miners were hit by worries of a Chinese slowdown.

"Stocks are being driven down burberry handbags outlet on reports of major discounts amongst the luxury good car brands in China and comments about weak iron ore demand," said Richard Batty, strategist at Standard Life Investments, with $248.37 billion of assets under management.

The dollar rose 0.2 percent against a basket of major trading-partner currencies, according to the U.S. Dollar Index .DXY. The euro weakened 0.14 percent against the greenback, to $1.3217.

"The dollar is gaining because of its safe-harbor appeal on worries about Chinese growth," said Joe Manimbo, senior market analyst at Travelex Global Business Payments in Washington.

U.S. crude oil prices dropped 2.48 percent to settle at $105.61 a barrel after Saudi Arabian Oil Minister Ali al-Naimi said the OPEC nation was pumping the highest level of oil in decades to supply every customer request, and was willing to immediately open the taps further if needed.

Benchmark 10-year Treasury notes erased most of their gains as Wall Street trimmed losses but were still trading 3/32 higher in price to yield 2.36 percent, down from 2.38 percent late Monday.

The plan, authored by congressman Paul Ryan, seeks to draw a sharp contrast between Republicans' vision of a smaller, less-intrusive federal government with that of President Barack Obama, who stresses the importance of social safety nets and emphasizes the positive role government plays in the economy.

The Ryan plan would shrink deficits to $3.13 trillion over 10 years - less than half the size of the deficit projected under Obama's own plan. It would dismantle Obama's 2010 healthcare reform law and make deep cuts to federal employee burberry sneakers women pensions and to social programs such as food stamps and the Medicaid health care program for the poor.

In offering a well-defined conservative alternative to the Democratic president's approach to solving the nation's long-term problems, Republicans are hoping to win over voters profoundly worried about huge deficits and Obama's stewardship of the economy.

"We are sharpening the contrast between the path we are proposing and the path of debt and decline that the president has placed us upon," Ryan said in a speech to the conservative American Enterprise Institute.

Where Obama and many Democrats want to raise taxes on the wealthy and boost near-term spending on infrastructure and education, Republicans want to cut taxes and spending, except for defense. They reckon that the Ryan budget will help portray them as better-equipped to govern responsibly and make tough fiscal choices.

The Ryan plan proposes to grind down public debt as a share of economic output to 63.5 percent by 2021, compared with 76.3 percent under Obama's plan. It was 67.7 percent at the end of 2011.

By contrast, the Republican presidential candidates' budget plans would do far worse on debt, according to the Committee for a Responsible Federal Budget, citing plans for deep tax cuts.

The bipartisan group of former government budget bureaucrats estimates that Mitt Romney's plans would balloon federal debt to as much as 96 percent of gross domestic product by 2021, while Rick Santorum's would expand it to 104 percent and Newt Gingrich's would expand it to 114 percent.

The plan from Ryan, who is frequently mentioned as a Republican vice presidential candidate, has little chance of becoming law due to opposition in the Democratic-controlled Senate. But it could still have some real-world consequences.

The overhaul of the popular but increasingly expensive Medicare plan sets up Republicans for another round of damaging election-year attacks from Democrats, who have vowed to preserve the fee-for-service program.

The Republican budget also seeks to cap discretionary federal spending on education, transportation and other government programs at $1.029 trillion, roughly $18 billion less than Democrats want. That sets up a battle over spending that could potentially shut down the government just weeks before the November 6 election.

ALTERED MEDICARE REFORMS

After proposing last year to Ray ban sunglasses convert Medicare into a voucher-like program to allow seniors to purchase private health insurance, Ryan has modified his reforms in a bid to blunt criticism that it would shift too many costs onto the elderly.

The new plan offers so-called premium support to allow beneficiaries to purchase either traditional Medicare or competing plans through a government-run exchange.

But political strategists say the party will still struggle to sell it to older voters who worry about their benefits.

The plan also drew a quick rebuke from the Federation of American Hospitals, which said it would "make it difficult for hospitals to meet the healthcare needs of seniors and the most vulnerable in our communities."

A statement from House Democrats branded it a "vicious plot to destroy our nation's promise to our seniors" while the White House said it was harmful to the vast majority of Americans.

"What we see in this proposal is, again, much like its predecessor, essentially a shift of money from the middle class, seniors and lower-income Americans, disabled Americans, to the wealthiest Americans," said White House spokesman Jay Carney.

Democrats see the Medicare reform push as politically toxic for Republicans in congressional races and are targeting Medicare-focused Oakley sunglasses campaigns against some 41 House Republicans that they see as vulnerable in November.

THE MAN BEHIND THE PLAN

But the political risk on Medicare has not daunted Ryan, who at 42 has fashioned an image as a brash young reformer bent on shrinking government. The budget gives him a huge platform to influence his party's direction and the campaign debate.

Known for his slick YouTube videos showing dire forecasts of debt growth and for slipping in iPod earbuds sometimes when reporters are around, Ryan has kept the debt debate on the boil since Republicans took control of the House in 2010.

But some lawmakers say House passage of the Ryan plan is not assured and House Speaker John Boehner may need to twist arms within his unruly Republican caucus for support.

"There are a variety of worries from a lot of different people and different angles," said Congressman Mike Simpson, a Republican on the Budget and Appropriations committees. "Some people - Medicare is the worry. Some people - discretionary spending is the worry. Some people - defense is the worry."

On discretionary spending, the Ryan budget seeks to reduce fiscal 2013 spending caps agreed with Democrats last year by $18.4 billion. Democrats warn that the cut breaks last year's debt-limit agreement meant to keep fiscal peace and risks a government shutdown by causing conflict over spending bills.

Some Tea Party Republicans who wanted deeper cuts may balk at the plan, but it does offer them some comfort by shielding defense and security spending from automatic spending cuts that are scheduled to kick in next January.

"It's just not good enough," said Republican Tim Huelskamp, a Budget Committee freshman, telling Reuters that he would vote against burberry ties it because the cuts do not go far enough.

The Ryan plan contains another element popular with Republicans across the board: tax reform. It proposes to cut top rates for individuals, paring back the number of tax brackets to two - 25 percent and 10 percent - from six now.

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