Obama focuses on economy

WASHINGTON — President Barack Obama returned to the unfinished business of a still struggling economy Tuesday night, outlining a second-term agenda with proposals designed to create jobs, expand the middle class and spur financial growth.

In his annual State of the Union address, Obama laid out plans in four main areas — manufacturing, education, clean energy and infrastructure — to try to help the nation recover from the worst recession since the Great Depression at what he said would be no additional cost.

“A growing economy that creates good, middle-class jobs — that must be the North Star that guides our efforts,” Obama said. “Every day, we should ask ourselves three questions as a nation: How do we attract more jobs to our shores? How do we equip our people with the skills needed to do those jobs? And how do we make sure that hard work leads to a decent living?”

He described a country that is making progress, ending long wars in Afghanistan and Iraq while clearing away “the rubble” of the Great Recession.

Now, he said, the country must forge policies to build a more secure future.

“It is our generation’s task, then, to reignite the true engine of America’s economic growth — a rising, thriving middle class,” he said.

“It is our unfinished task to restore the basic bargain that built this country — the idea that if you work hard and meet your responsibilities, you can get ahead, no matter where you come from, no matter what you look like, or who you love. It is our unfinished task to make sure that this government works on behalf of the many, and not just the few; that it encourages free enterprise, rewards individual initiative, and opens the doors of opportunity to every child across this great nation of ours,” he said.

He proposed raising the minimum wage from $7.25 to $9 an hour. He recommended spending $65 billion on road, bridge and building repairs. He unveiled a plan to save eligible homeowners $3,000 annually by refinancing at lower interest rates.

Obama starts his second term with a stubbornly high unemployment rate — higher for women and black people than when he first took office — falling consumer confidence and a mounting deficit as he faces often uncooperative lawmakers on Capitol Hill. He insisted that Democrats and Republicans put aside their differences and take action, mostly immediately to find an alternative to looming across-the-board budget cuts that could harm the economy in weeks.

Tens of millions were expected to watch the address, delivered to a joint session of Congress. Sen. Marco Rubio, of Florida, a rising Republican star, was to offer his party’s response in English and Spanish.

Rubio said, in prepared remarks, that the “free enterprise economy” will create jobs and, not as Obama has suggested, the collection of new revenue.

“Raising taxes won’t create private sector jobs,” he said in prepared remarks. “That’s why I hope the president will abandon his obsession with raising taxes and instead work with us to achieve real growth in our economy.”

Obama spoke about other issues Tuesday — including rewriting the nation’s immigration laws and combating climate change — but mostly in the context of the economy.

There were few exceptions: Obama pressed anew for the most aggressive gun-control plan in generations. More than 100 victims and family members of victims — including some from Newtown, Conn., where 26 people were killed at an elementary school in December — were at the Capitol on Tuesday.

Obama is forming a commission to study changes in the voting system after Americans endured long lines and administrative problems at the polls in November.

He announced that by this time next year more than half the U.S. troops in Afghanistan — 34,000 — will have returned home as the Afghans take responsibility for security.

He condemned North Korea for conducting its third nuclear test hours earlier, warning that it undermines regional stability, violates North Korea’s United Nations obligations and increases the risk of proliferation. He called for a reduction in nuclear weapons worldwide.

Obama will fly to Asheville, N.C., on Wednesday to begin selling his plans to the nation. Later in the week, he will continue the campaign-style pitch with stops in Atlanta and Chicago.

“He’s going to take his press conference out to the country,” said Rep. Sander Levin, of Michigan, the highest-ranking Democrat on the tax-writing House Ways and Means Committee. “The president learned from his first term, you need to have a major dialogue.”

Obama’s speech included both proposals that already had been rejected by Congress, such as $50 billion for roads and bridge repairs, as well as new plans like raising the minimum wage, which has not been authorized since 2007.

Obama pledged, as he did during his campaign last year, to protect the middle class and the country’s social safety net. He pressed for a “balanced” solution to boost the economy that includes additional revenue that comes from eliminating tax loopholes and deductions benefiting certain industries or the wealthy as well as reductions in projected spending.

And he urged Congress to pass a package of modest cuts and tax changes as a way to delay drastic, across-the-board federal spending reductions that are scheduled to take effect March 1.

White House officials said the president will pay for his spending proposals by re-prioritizing items in the budget. His proposed budget will be released in mid-March.

“Tonight, I’ll lay out additional proposals that are fully paid for and fully consistent with the budget framework both parties agreed to just 18 months ago,” according to prepared remarks. “Let me repeat — nothing I’m proposing tonight should increase our deficit by a single dime. It’s not a bigger government we need, but a smarter government that sets priorities and invests in broad-based growth.”

On education, Obama spoke of expanding education for children before they enter kindergarten, investing in vocational programs that fill the need of the business community and making college more affordable.

On infrastructure, Obama stressed the need to spend public money on roads and bridges.

“We’re not investing enough in our infrastructure,” said Bob Costello, chief economist and vice president of the American Trucking Association. “You have an industry that has been saying for years, ‘Please tax’ our fuel consumption to pay for highway improvements.”

Obama announced that he issued executive orders, which do not require congressional approval, to open three manufacturing institutes and to improve the security of the computer networks that direct the nation’s crucial infrastructure systems — such as electricity, finance and transportation. And he threatened to sign more if Congress does not pass changes to prepare for climate change.

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