President Barack Obama already has promised to veto the legislation if it reaches his desk in the unlikely event it passes the U.S. Senate where Democrats have a majority.
Republicans are calling the legislation the "Cut, Cap and Balance Act." The plan, which Republicans hope to bring to a House vote next week, would slash federal spending by $111 billion; limit yearly spending to 22.5 percent of GDP and require Congress pass a balanced budget amendment, all before raising the national debt ceiling by $2.4 trillion.
The U.S. Treasury says debt limit must be raised by Aug. 2 to prevent government default.
"This plan isn't 'Cut, Cap and Balance,'" White House Communications Director Dan Pfeiffer told reporters in a conference call. "It's 'Duck, Dodge and Dismantle.'"
Pfeiffer said the plan would go further than the earlier budget plan proposed by U.S. Rep. Paul Ryan, making even deeper cuts in Medicare. The Ryan plan didn't cut Social Security, Pfeiffer said, but the new plan does.
Ryan's plan would have cut the Medicare program by converting much of it into private grants.
Jason Furman, deputy assistant to the president for economic policy, said: "It's also important to understand that cuts of this magnitude would have ... devastating effects on the economy. ... In contrast the president is focused on cutting the budget by $4 trillion over the next 10 years" with phased reductions that would have a limited economic effect. Obama has proposed closing tax loopholes -- something Republicans call raising taxes -- as well as spending cuts.
Under the GOP plan a balanced budget must be passed before taking action on raising the debt limit, Furman said. "This amounts to holding the debt limit hostage."
Pfeiffer said the president remains optimistic about a resolution, and "with reasonable compromises we can go a long way ... in the next two weeks."