Wisconsin governor unveils deep spending cuts

A man marches with a ''don't tread on me'' flag outside the State Capitol building as they wait to occupy it during day fourteen of their protest against the proposed budget cuts by Wisconsin Governor Scott Walker in Madison, Wisconsin February 28, 2011.

MADISON, Wisconsin (Reuters) - Wisconsin Republican Gov. Scott Walker unveiled on Tuesday a budget that makes deep cuts in spending, and he said that if Democrats continue to block his proposal to curb the power of public sector unions local governments may have to make even deeper cuts.

Walker, whose plan to curtail collective bargaining sparked huge protests and a nationwide debate, said he would cut state spending by 6.7 percent including more than $1.25 billion in reduced aid to local governments.

Walker said the cuts would reduce the state's structural budget deficit by 90 percent to $250 million, the lowest in recent history.

The reception Walker received from lawmakers in the audience was welcoming despite the rancorous debate that has raged in the Capitol.

Outside the building, where hundreds of protesters denied access to the building gathered, the reception was far less warm. The protesters' chants of "Hey, Hey, ho, ho, Scott Walker has got to go" could be heard inside the chamber where the governor was speaking, though they did not drown him out.

The budget address at the Capitol Building comes amid efforts by Walker and his fellow Republicans to end a standoff with Democratic state senators, who fled the state to avoid voting on Walker's initiative to curtail collective bargaining for most workers.

Representatives for the 14 Democratic senators who decamped to neighboring Illinois met with Senate Republican Leader Scott Fitzgerald in Kenosha, Wisconsin, though Fitzgerald did not say what was discussed, the website Wispolitics.com reported.

In his budget address, Walker again tried to apply pressure on the Democrats to return and vote on the union measure.

"If the 14 Senate Democrats do not come home, their local communities will be forced to manage these reductions in aid without the benefit of the tools provided in the repair bill," Walker told a joint session of the legislature.

What began as a dispute in Wisconsin between a Republican governor and state labor unions has grown into what could be the biggest confrontation with organized labor since President Ronald Reagan fired striking air traffic controllers in 1981.

President Barack Obama weighed in on behalf of the unions and Republican leaders have told him to butt out. Unions have been reliable supporters of Democrats for decades.

One fear of unions is that the Wisconsin actions are a harbinger of things to come in other states.

In Ohio, the Republican-dominated legislature on Tuesday considered a bill like the one in Wisconsin to curtail some collective bargaining rights for public sector workers and eliminate their right to strike.

Supporters of the measure said it was needed to close the state's $8 billion two-year budget deficit, which Republicans blame on excessive promises to unionized workers.

"This isn't about deficits. This is about union-busting," said Evan Goodenow, 46, an unemployed man who was among some 8,000 protesters who converged on the Capitol, in Columbus.

A group of 40 Democratic lawmakers in Indiana who like their colleagues in Wisconsin adopted the tactic of leaving the state last week to deny Republicans a vote, showed no inclination to return. They object to bills introduced by Republicans in Indiana that would give parents vouchers for private schools and end collective bargaining for state employees.

(Additional reporting by Karen Pierog, and James Kelleher; Writing by Andrew Stern and James Kelleher; Editing by Greg McCune)