MADISON, Wisconsin (Reuters) – Thousands of demonstrators converged on the Wisconsin state capital on Sunday to oppose a bid to reduce public employee union bargaining power, marking the start of a second week of growing protests with threats of wider dissent ahead.

Inside the Capitol's central rotunda and in its balconies, opponents of the controversial proposal by Republican Governor Scott Walker banged drums and shouted "We're not going away!"

Outside, where wet snow was falling, protesters chanted "Union busting is disgusting" against the governor's bid, which supporters say is needed to control state debt and spending and opponents contend would break the back of state worker unions.

While the crowds had dwindled from Saturday, when officials estimated about 55,000 demonstrators gathered, a major showing was expected on Monday, when the Wisconsin Education Association Council, representing some 98,000 public education employees, was planning a rally.

Monday is a mandatory furlough day for state workers.

Speaking in a television interview on Sunday, the governor said he expects the Democrats who oppose his plan will agree to debate it early this week.

Fourteen state Democratic senators have left the state to deny the Wisconsin legislature a quorum needed to consider the controversial proposal.

Those senators have "failed to do their jobs," Walker said on Fox Network's "Fox News Sunday."

"If you want to participate in democracy, you've got to be in the arena, and the arena is right here in Madison, Wisconsin," he said.

Mike Browne, an aide to Wisconsin Senate minority leader Mark Miller, said Democrats were ready to compromise but not on Walker's demands to weaken public union collective bargaining.

"He has before him the option to do what he wants financially. But he needs to compromise," Browne said. "The ball is in the governor's court."

Local media reported late Sunday that Republican majority leader Scott Fitzgerald said he will convene the Senate on Tuesday with or without the Democrats. Fitzgerald's party holds a 19-14 majority but needs a quorum of 20 to vote on spending bills. Other bills require only a quorum of 17 members.

One opponent of the governor's proposal, David Poklinkoski, the president of the International Brotherhood of Electrical Workers, Local 2304, called it "a bold, opening salvo not only in Wisconsin but across the country."

"Private sector workers know we're next," he said, adding: "If you had told me last Friday, when the governor dropped this bomb on us, that 200,000 people would have turned out in the streets over the next week to protest, I would have said 'no way.'

"But the other side has made it clear that we're ground zero in a national fight. So we need to act like it, and so far we have," he said.

Public sector workers in West Virginia, in support of the Wisconsin protests, will rally on Monday to demand better pay and improved working conditions, a union spokesman said.

FLASHPOINT IN NATIONAL STRUGGLE

Wisconsin, where the first demonstrations were staged last Sunday outside the governor's residence, has become the flashpoint for a U.S. struggle over efforts to roll back pay, benefits and bargaining rights of government workers. If the majority Republicans prevail, other states could be emboldened to take on the powerful unions.

Those backing the proposal were planning a nationwide demonstration on Tuesday, said Ned Ryun, the head of American Majority which sponsored a rally on Saturday attended by about 5,000 supporters of the Tea Party limited-government movement.

"What happens in Wisconsin will set the tone for the rest of the nation," he said.

The governor said on Fox he expects the Democrats who left the state for Illinois to return in coming days, although one of them has said they are prepared to be away for weeks.

"My hope is that cooler minds will prevail and by some time earlier this coming week they'll show up for their job," Walker said.

The Wisconsin State Assembly is due to take up the proposals on Tuesday. Republicans have a large enough majority to quorum in the Assembly without the Democrats.

"My hope is before Tuesday enough Republicans will recognize this proposal is over-reaching and the support for this proposal wanes. I've been told some Republicans will reconsider," State Assemblyman and Minority Leader Peter Barca said on Saturday.

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.

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.

Union and Democratic leaders say they are willing to compromise on benefits if Republicans back off the bid to weaken collective bargaining, but Walker and his allies have stood firm.

Walker estimates the state budget deficit for the rest of this fiscal year at $137 million and for the next two fiscal years under its biannual budget at $3.3 billion.

Walker said the alternative is to lay off more than 10,000 public employees.

(Editing by Ellen Wulfhorst, Peter Bohan and Tim Gaynor)

MADISON, Wisconsin (Reuters) – The issues were serious but the mood was cheery on Sunday among demonstrators in Wisconsin protesting an effort by the Republican governor to reduce the bargaining power of public employee unions.

Protesters, marking the start of a second week of mass action, jammed inside the state Capitol's rotunda, protected from the sleet and wet snow outside, to munch pizza donated by sympathizers from out of state and from foreign countries.

"It's like a street festival," said Tyler Pagel, 29, whose wife is a teacher, one of tens of thousands of workers who could be affected by Gov. Scott Walker's proposal to roll back pay, benefits and bargaining rights of government employees.

Pagel joked that even in Madison, which was a hotbed of student activism in the late 1960s and early 1970s, the protests were extraordinary.

"This is Madison. So it's not hard to get 200 people to protest anything. But 2,000? Or 20,000? It's unbelievable," he said.

Adding to the festive atmosphere was the sound of someone blowing a vuvuzela, one of the buzzing horns whose sound permeated the World Cup competition last year in South Africa.

Draped in a Wisconsin state flag, Pagel distributed pizzas paid for by a supporter in Minnesota and delivered to the Capitol where some 1,500 people were camped inside on Sunday.

A local pizza parlor called Ian's posted a sign listing where it was getting donations for pizzas to be delivered to the demonstrators -- 40 of the 50 U.S. states, Korea, Finland, Denmark, Australia, Turkey, Canada, the Netherlands, China, Australia, China, England, Egypt and elsewhere.

Demonstrators have been pouring into the state capital of Madison for days since the governor made his controversial proposal, numbering as many as 55,000 on Saturday.

A mass rally was expected on Monday, a mandatory furlough day for state workers.

"GROUND ZERO"

Jeff Rae, 30, who works for the Transport Workers Union in Washington, said he arrived in Madison to gather intelligence on the controversy. His union sees Wisconsin as the first in a series of battles nationwide, he said.

"This is Ground Zero," Rae said. "Ohio's next."

Like Wisconsin, Ohio is looking to cuts in spending to balance its budget. In Ohio, however, the odds are seen favoring organized labor more than in Wisconsin, Rae said.

Robert Koenig, a 49-year-old employee with the agency that oversees Wisconsin's retirement system, said he had accompanied members of his daughter's seventh-grade class to the capitol earlier in the week to watch the political drama unfold.

"I told them, 'You're not going to school today. But you're going to learn an important civic lesson,'" he said.

Pagel said he planned to spend the night sleeping in the rotunda where on Saturday night, some 400 people slept inside.

They are allowed to stay because a handful of Democratic Assembly members were holding an ongoing hearing on the third floor to listen to testimony from people opposed to the bill and thus the building remained open.

Local residents posted signs advertising space in their homes for those looking for a free place to sleep.

(Reporting by James Kelleher; Writing by Ellen Wulfhorst; Editing by Peter Bohan)

MINNEAPOLIS (Reuters) – A severe winter storm was driving across the upper Midwest on Sunday, dumping up to 15 inches of snow and causing white-out conditions in spots from the Dakotas through Minnesota and into Wisconsin.

State officials warned against travel in most of South Dakota where roads were not already closed, most southern Minnesota roads were slick and snow-covered with limited driver visibility and airlines canceled hundreds of flights.

The National Weather Service said travel will be very difficult at times due to ice and snow in southern Wisconsin, where a mass protest against changes to collective bargaining laws was expected to continue at the state capital in Madison.

Forecasters expect up to four inches of snow in southern Wisconsin with some sleet and freezing rain leading to ice accumulations in some areas.

The storm was expected to dump up to 15 inches of snow in Minnesota from Sunday to midday on Monday and nearly a foot of snow across central to northeast Wisconsin, the National Weather Service said. Earlier forecasts had aimed for snow accumulations of up to 18 inches in parts of Minnesota.

The National Weather Service on Sunday afternoon forecast 10 to 14 inches of snow for the Twin Cities overall by the time the storm ends on Monday, said Tony Zaleski, a meteorologist with the National Weather Service in Minnesota.

"The biggest snow amounts have been basically across south central Minnesota," Zaleski said.

Blizzard conditions were developing west and south of Minneapolis where up to 8 inches of snow were reported in New Ulm and Lester Prairie, the National Weather Service said.

South suburbs to Minneapolis and St. Paul had already reported snow falls of 5 to 7 inches on Sunday afternoon, Zaleski said.

"There is a lot of blowing snow out there, it's real tough to measure when you have the snow blowing at 20 to 30 miles per hour," Zaleski said.

Most flights were canceled out of Minneapolis-St. Paul International Airport on Sunday from the storm that brought high winds that reduced operations, airport spokeswoman Melissa Scovronski said.

Delta Air Lines canceled hundreds of flights at the airport Sunday and expects more flight cuts on Monday across its route system, particularly in the midwest and northeast United States, spokesman Anthony Black said.

Heavy snows in December and at other points already had pushed snowfall totals to more than 61 inches in the Twin Cities before the latest storm, making it the fifth snowiest on record, according to National Weather Service statistics.

A 10-inch snowfall would make it the second snowiest winter behind only 1981-82 when 76.9 inches of snow were recorded.

Blizzard conditions crossed much of South Dakota with more than a foot of snow and wind gusts of up to 40 miles per hour in a band from Pierre to Watertown, forecasters said.

South Dakota closed Interstate 29 from Sioux Falls north to the North Dakota border on the eastern side of the state and closed a 150 mile stretch of Interstate 90 from Wall to Chamberlain on the south central part of the state.

(Reporting by David Bailey; Editing by Ellen Wulfhorst and Tim Gaynor)