Legislation introduced by Wisconsin Gov. Scott Walker could strip public workers in the state of nearly all of their collective bargaining rights.
The bill passed the state legislature's budget writing committee late Wednesday night and is now being considered by the state Senate.
Large declines in tax revenue due to the sluggish economy have forced Wisconsin and other states to go after teachers and government workers to help balance their budgets.
Gov. Walker's proposal would essentially cut government workers pay by 7 percent, and is considered to be the nation's most aggressive anti-union proposal.
"We don't have a lot of options here folks. It's not like we're choosing to do this. We are broke," said Wisconsin state Rep. Alberta Darling.
Walker assured the bill would save the state $300 million over the next two years.
"We're at a point of crisis. We've got an economic and fiscal crisis in this state," he said. "And we need leaders who are going to stand up and look at things differently than what we've done in the past."
Thousands of union workers protested at the state's capital building, Thursday.
Many of the protestors were teachers, forcing school districts in the area to close because of the rallies.