The Republican Party will take a more active role during President Barack Obama’s second term, at least if House Budget Committee Chairman Paul Ryan has his way. Speaking  at the National Review Institute Summit over the weekend, Ryan expressed pessimism that Democrats and Republicans can work together to solve America’s fiscal problems.

While the budget negotiations take place, Ryan warned conservatives to avoid what he described as Obama’s baits. He expects the president will try to divide the Republican Party with “phony emergencies and bogus deals.”

The government is fast approaching a $16.4 trillion debt ceiling on the horizon, and the nation is inching closer to the scheduled budget cuts known as “sequester.” Congressional lawmakers will need to negotiate deficit reduction plans that could also improve the economy. The House has already passed a Republican measure to extend the debt limit until May, and the Senate is expected to adopt the bill. This will give lawmakers time to work on passing a formal budget and begin other critical fiscal negotiations.

The Senate has not passed a budget in nearly four years, and the government has been funded through temporary measure called “continuing resolutions.”

“We won’t play the villain in his morality plays,” Ryan said “We have to stay united. We have to show that — if given the chance — we can govern. That we have better ideas.”

“The fact is, we’re not in the wilderness,” even after a resounding defeat in the presidential election, in which Ryan and presidential candidate Mitt Romney lost the popular vote by 5 million votes. “Republicans control both the House and most of the statehouses. So we have to oppose the president and the Senate on some fronts — and engage them on others — because we can’t let our country have a debt crisis. If they won’t help fix our entitlements, then we have to buy time. We have to keep the bond markets at bay — for the sake of our people.”

In an interview on “Meet the Press” on Sunday, Ryan said he thinks the sequester — automatic cuts in defense and non-defense spending — is going to happen. Lawmakers have until March 1 to find a solution.

“We think these sequesters will happen because the Democrats have opposed our efforts to replace those with others, and they’ve offered no alternatives,” the Wisconsin congressman explained.

Obama’s second-term agenda is sure to be a challenge for Republicans, especially the ones who are more conservative. Obama has promised to protect entitlements, impose stricter gun laws, and tackle immigration reform and climate change.

Given all of those challenges, the GOP sees opportunity. Ryan expects Obama to fall short of his goals, and said Republicans must be waiting with a plan for action.

Ryan laid out two roles for conservatives in Obama’s second term: to mitigate bad policy and promote what he believes to be good policy at every opportunity. At the summit, Ryan urged Republicans to move away from just responding to the Democrats’ proposals and instead offer their own solutions. He isn’t confident Democrats will accept those proposals but said “when reform is possible, we will be ready.”

The horizon before us might seem narrow, but believe me, it’s going to grow,” Ryan said. “As the president implements his agenda, the results will fall far short of the rhetoric. And they won’t be pretty. We will have tepid growth and deficits — health-care price controls and rationing.

“At that moment, we will be ready,” he added. “We will offer an alternative vision. We will explain how our vision differs — how it rests on vibrant communities — how it increases social mobility. We will show how we can govern better by governing closer to the people — by strengthening our families and their livelihoods. And we will make clear that we have better ideas to combat poverty. Our policies will lift everyone in this country.”