Wisconsin Assembly begins debate on union curbs

MADISON, Wisconsin (Reuters) - The Wisconsin state Assembly on Tuesday opened debate on a Republican proposal to curb the power of public sector unions that has sparked mass demonstrations and a tense stand-off with Democrats.

Hundreds of protesters choked the Capitol halls on Tuesday, as they did last week, chanting "It's about rights, it's not about money," while others banged plastic pails outside in opposition.

The proposal, which has been advanced by Republican Governor Scott Walker as a way to cope with a $137 million state budget deficit that is projected to hit $3.6 billion by 2014, would strip most collective bargaining rights from many state workers.

National attention has focused on the turmoil in Madison, which parallels similar battles in Washington and across the country as the United States confronts spiraling public deficits and pressure from voters to deal with them without stifling economic growth.

Wisconsin Senate Democrats, who fled the state on Thursday to deny a quorum for voting on the budget proposal, stayed outside the state again on Tuesday. But Republicans pushed ahead in the Assembly where they have a strong enough majority to pass the proposal. Democrats vowed to flood the bill with dozens of amendments in a bid to derail it.

"I cannot express in strong enough terms that our goal is not to delay this bill. Our goal is to stop this bill, end the impasse and start over," state Assembly Democratic leader Peter Barca said on Tuesday.

Walker has said state employee layoff notices could be issued as soon as next week if the impasse continues.

Walker, who plans a televised address on Tuesday evening, has said the state is broke and there is no room to compromise on the proposal.

Wisconsin has become the flashpoint for a struggle over efforts to roll back pay, benefits and bargaining rights of government workers. If the majority Republicans prevail, several other states could be buoyed in efforts to take on the powerful public unions.

The Midwest state, known for its dairy industry and Super Bowl-winning Green Bay Packers football team, is a stronghold of organized labor. It was the first state to grant collective bargaining rights to public employees in 1959, and President Barack Obama, who has received strong political backing from unions, last week blasted the governor's "assault" on them.

At the same time, U.S. state and local governments are struggling to balance budgets after the recession decimated their finances.

Other states like Texas, Arizona and Ohio are relying mainly on cuts in spending, while Minnesota and Illinois are raising taxes. Public workers rallied outside the Ohio legislature on Tuesday.

In Wisconsin, Barca presented 15 amendments at the opening of debate and said dozens more were ready to be introduced, moves Republican Assembly Speaker Jeff Fitzgerald called "delaying tactics."

WEAKENING OF UNIONS

Extra security was in place to handle massive crowds again on Tuesday. Security officers searched backpacks of visitors and large areas of the Capitol building in Madison were cordoned off with yellow crime scene tape.

The changes sought by Walker in Wisconsin would make state workers contribute more to health insurance and pensions, end government collection of union dues, let workers opt out of unions and require unions to hold recertification votes every year. Collective bargaining would be allowed only on wage increases up to the rate of inflation.

Walker wants the bill passed by Friday as part of a plan to push principal payments on general obligation bonds into future years to save $165 million. Under that plan, the bill must be passed by Friday to allow time to sell the debt.

(Writing by David Bailey; Reporting by James Kelleher and Jeff Mayers; Editing by Greg McCune and Cynthia Osterman)