Cong. Paul Ryan (R-Janesville) arrives for a town hall meeting about his Federal budget plan,Thursday April 28, 2011 at the Waterford Village Hall. (Mark Hertzberg/AP)

“Our nation is quickly approaching a debt crisis that will do serious damage to Wisconsinites and all Americans if it is not properly addressed," Ryan said Tuesday morning. "I believe continuing to serve as Chairman of the House Budget Committee allows me to have a greater impact in averting this debt-fueled economic crisis than if I were to run for the United States Senate."

Ryan’s name immediately came up in discussions about the seat being vacated by Sen. Herb Kohl (D). Ryan has risen to national prominence in the past few months as the face of House Republicans’ budget plans. Both Republican National Committee Chairman Reince Priebus and National Republican Senatorial Committee Chairman John Cornyn (R-Texas) spoke with Ryan about a bid.

But Ryan would face a difficult race that, if he won, would leave him a freshman in the Senate instead of chairman of the House Budget Committee. He is expected to have a good shot at becoming Ways and Means chairman in 2013. “The impression I’ve gotten from a lot of folks is that there’s greater opportunity for him in the House,” said Scott Becher, a Wisconsin Republican strategist. “I think he really want to be a budget hawk.”

Ryan’s decision means former Wisconsin Gov. Tommy Thompson is very likely to launch a campaign. Thompson, who ran a brief presidential campaign in 2008 and flirted with a Senate bid in 2010, is not expected to clear the field the way Ryan would have. Thompson has come out against repealing Democrats’ health-care law and praised some Democratic health-care efforts. Many Republican strategists expect a primary challenge in the form of former Rep. Mark Neumann.

In Wisconsin, we're very lucky to be able to call Paul Ryan one of our own. There is no doubt he would have made an excellent U.S. Senator,” Neumann said in a statement. "I am still seriously considering a U.S. Senate candidacy and listening to what the people of Wisconsin hope to see from their next Senator.

On the Democratic side, Reps. Tammy Baldwin and Ron Kind are both expected to run. Milwaukee Mayor Tom Barrett has decided against it. Liberal activists have been encouraging Sen. Russ Feingold to get in the race, but he has given no sign of his plans as yet.