Madison - Gov. Scott Walker's bill to strip almost all union rights for public workers advanced out of committee Wednesday just before midnight, setting up a pivotal floor vote in the Senate that is expected for Thursday amid massive demonstrations.

Voting 12-4 with all Republicans in favor of the bill and all Democrats against it, the Legislature's Joint Finance Committee added new civil-service protections for local government employees and kept cuts to public worker benefits. Walker has said that the cuts to worker benefits and to decades-old union bargaining laws are needed to help balance the state's gaping budget shortfall in this year and the next two.

The budget committee began debating the bill at 7:45 p.m. Wednesday, after Republicans spent hours behind closed doors crafting the changes. The Senate and Assembly could now act on it as early as Thursday.

No further changes will be made to the bill passed by the committee, said Senate Majority Leader Scott Fitzgerald (R-Juneau).

"This will pass in that form," Fitzgerald said.

His brother, Assembly Speaker Jeff Fitzgerald (R-Horicon), said he also expected the Legislature to accept the changes the committee adopted and not make any further ones.

Some senators attempted to make significant changes to the bill Wednesday, but it appeared their efforts had failed.

The changes the committee adopted would require all local governments to create civil-service systems similar to the one for the state. It would also allow limited-term employees to keep their benefits. Some limited-term employees have worked for the state for years, and the original version of the bill would have taken away all their health care coverage and retirement benefits.

The debate in the committee was impassioned and at times emotional.

"People have said they're willing to sacrifice. Why are we going after people's rights?" asked Rep. Tamara Grigsby (D-Milwaukee).

But Rep. John Nygren (R-Marinette), whose wife is a teacher, said he believed the bill was needed to ensure schools are run efficiently.

"What about the right of the taxpayer to run a frugal school district?" Nygren said.

The changes did not appease the thousands of teachers and state workers who have filled the Capitol for two days.

They booed loudly as they learned the bill still would take away their union rights as they watched the committee proceedings on televisions mounted in the Capitol Rotunda.

"I think it's disgusting," said John Bausch, a Darlington music teacher in elementary and middle school.

"This is not what Wisconsin is all about. We've had collective bargaining for (50) years and to throw it all out without our say is a disgrace."

More are expected to come to the Capitol after Mary Bell, president of the Wisconsin Education Association Council, urged teachers and other Wisconsin residents to come to Madison on Thursday and Friday. She stopped short of asking teachers to walk off their jobs.

In Milwaukee, Superintendent Gregory E. Thornton said teachers are expected to be at work Thursday and Friday, and failure to do so, without a valid excuse, will result in disciplinary action.

WEAC's effort came as Madison schools closed Wednesday because more than 40% of teachers called in sick so they could lobby legislators. Madison schools will be closed Thursday for the same reason. Other districts also were considering closing.

Walker, who proposed the bill, said he was "disappointed" with the action by the Madison teachers and that he appreciates that other public employees are showing up for work. He said he respects workers' right to demonstrate but that he is "not intimidated into thinking that they're the only voices out there."

In a sign of the national attention the proposal is drawing, U.S. Secretary of Education Arne Duncan has scheduled a telephone call with Walker for Thursday, said Jim Bradshaw, a spokesman for the federal agency. The Associated Press reported Duncan said Wednesday at a Denver conference of teacher unions and school administrators that the move in Wisconsin and other states to strip teachers of bargaining rights worries him.

In an interview with WTMJ-TV (Channel 4), President Barack Obama said public workers have to be prepared to make concessions but that he thought Walker's plan was unduly harsh on unions.

Walker offered the bill to help shore up the state's finances in advance of a budget to be delivered Tuesday that is expected to include major cuts in areas like aid to local schools and governments.

He first wants the budget repair bill passed to help clear up a $137 million budget shortfall for the fiscal year ending June 30 and ease solving a deficit of more than $3 billion over the next two years. The cuts to benefits would save taxpayers nearly $330 million through mid-2013.

Major elements of the budget-repair bill remain in place. It would require most public workers to pay half their pension costs - typically 5.8% of pay for state workers - and at least 12% of their health care costs. It applies to most state and local employees but does not apply to police, firefighters and state troopers, who would continue to bargain for their benefits.

Except for police, firefighters and troopers, raises would be limited to inflation unless a bigger increase was approved in a referendum. The non-law enforcement unions would lose their rights to bargain over anything but wages, would have to hold annual elections to keep their organizations intact and would lose the ability to have union dues deducted from state paychecks.

The most significant change the Joint Finance Committee approved would require local governments that don't have civil-service systems to create an employee grievance system within months. Those local civil-service systems would have to address grievances for employee termination, employee discipline and workplace safety.

The bill also gives Walker's Department of Health Services the power to write rules that would change state laws dealing with medical care for children, parents and childless adults; prescription drug plans for seniors; nursing home care for the elderly; and long-term care for the elderly and disabled outside of nursing homes.

The programs that could see changes under the proposal would include the BadgerCare Plus and BadgerCare Core plans, Family Care and SeniorCare.

Lawmakers planned to modify the bill so that the Walker administration could drop people from BadgerCare Plus because of having too high an income temporarily, but not permanently. Current income eligibility standards would be restored on Jan. 1, 2015, under the changes the committee adopted.

The bill was also amended to allow the Walker administration to sell or lease state-owned heating plants but first require a review of any deals by the Joint Finance Committee.

Separate from the committee's action, individual lawmakers are hoping to make other changes to the bill.

Two GOP sources familiar with internal talks said Sens. Dale Schultz (R-Richland Center) and Van Wanggaard (R-Racine) were backing a plan to put at least some union bargaining rights back into the bill. One source said the plan would make use of devices such as sunset clause to bring back certain bargaining rights in future years.

Schultz acknowledged he was working on alternatives, though he said he couldn't comment on any details. He said he was headed to his home and expected to find both protesters and law enforcement protection there.

"Everything is a work in progress and everything is fluid and there are no lines drawn in the sand," Schultz said. "Obviously, it's a very emotional time for us."

Wanggaard sent out a statement after the budget committee action saying he would vote for the bill as amended by the panel.

"'In a democracy, making law is like making sausage.' I never fully understood that statement until this week," Wanggaard said. "No compromise is perfect, but I am thankful that the bill has been substantially modified to add additional worker protection."

Before the committee met Wednesday, Walker told reporters he still had the votes to pass the proposal without changes.

"We're willing to (make changes), but we're just not going to fundamentally undermine the principle of the proposal, which is to let not only the state but local governments balance their budgets," he said.

The committee debated the bill Wednesday night after holding a 17-hour public hearing on it that ended at 3 a.m. Wednesday. Hundreds of people were still registered to speak when Republicans halted the hearing.

Democratic lawmakers then started an impromptu hearing of their own. They were still taking testimony as of 10 p.m. Wednesday - 36 hours after the official hearing started.