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MADISON (Reuters) - The Wisconsin state Assembly on Thursday approved sweeping restrictions on public sector unions in a stinging rebuke of the labor movement that critics fear will encourage other states to follow.
After a short debate, the Republican-dominated Assembly voted 53-42 to limit government union bargaining rights to wages only and impose a series of other restrictions. Four Republicans joined Democrats in voting against.
The proposed law sparked fierce opposition from Democrats and labor unions across the nation and drew the largest demonstrations in Wisconsin since the Vietnam War.
Several thousand demonstrators furious about the proposal were massed outside the Capitol building and police blocked off streets surrounding the building.
Wisconsin's newly elected Republican Governor Scott Walker hailed the vote that ended a three-week standoff.
"Their action will save jobs, protect taxpayers, reform government, and help balance the budget," Walker said in a statement after the vote.
What began a month ago as a Republican effort in one small U.S. state to balance the budget has now turned into a national confrontation with unions that could be the biggest since then President Ronald Reagan fired striking air traffic controllers nearly 30 years ago.
Walker insisted the limits are needed to help the state's cash-strapped municipalities deal with a projected $1.27 billion drop in aid over the next two years from the state, struggling to close its own $3.6 billion budget gap.
The stakes are high for labor because more than a third of U.S. public employees such as teachers, police and civil service workers belong to unions while only 6.9 percent of private sector workers are unionized. In Wisconsin, 46.6 percent of government workers are union members.
Unions also are the biggest single source of funding for the Democratic party.
Democratic Assembly member Tamara Grigsby said she sobbed on Thursday when she saw police dragging protesters away from the Capitol so the Assembly could convene.
"You're wrong today and you're on the wrong side of history and you're going to pay the price for it," she said of the Republicans who approved the proposal.
Police physically dragged some protesters out of the Capitol building on Thursday morning and cordoned off streets around the Capitol. The protests have been peaceful through three weeks of demonstrations and not a single arrest has so far been made, police said.
Critics accused Walker and the Republicans of flouting the law by using a legislative maneuver to ram the draft bill through the state Senate on Wednesday evening on short notice and without debate.
Democratic state Rep. Mark Pocan called the Senate proceedings "a kangaroo Legislature."
Exactly three weeks ago, all 14 state Senate Democrats senators left the state to deny the Republicans, who have 19 Senate members, the quorum of 20 needed on a budget vote. That ended abruptly on Wednesday when Republicans stripped out the sections that involved financial matters and voted anyway.
The Senate bill severely restricts collective bargaining for tens of thousands of the state's public worker unions and increases their health care and pension contributions. Wisconsin has some 175,000 public sector workers. It also would require unions to take a vote of members every year to continue to represent workers.
A number of other states where Republicans swept to victory in the 2010 elections are considering measures dealing with public sector unions. They include Ohio, Indiana, Iowa, Idaho, Tennessee, Kansas and New Hampshire.
Reporting by James Kelleher, Jeff Mayers and David Bailey; Editing by Peter Bohan and Greg McCune