Citing Wisconsin’s gaping budget shortfall for this year and even larger ones expected in the years ahead, Gov. Scott Walker proposed a sweeping plan on Friday to cut benefits for public employees in the state and to take away most of their unions’ ability to bargain.

The proposal by Mr. Walker, a Republican who was elected in November after pledging that he would get public workers’ compensation “into line” with everyone else’s, is expected to receive support next week in the State Legislature, where Republicans also won control of both chambers in the fall.

The prospect left union leaders, state and local employees and some Democrats stunned over the plan’s scope and what it might signal for public-sector unions in the state. Union leaders began planning rallies in Madison and contacting lawmakers, pressing them to reject the idea.

Mr. Walker said Wisconsin was prepared for any fallout, noting in an interview that the National Guard was ready to step in to handle state duties, if need be.