Obama to call for urgent steps on US economy

US President Barack Obama will lay out a jobs package worth more than $300 billon on Thursday, staking his re-election hopes on a call for urgent bipartisan action to revive the faltering American economy.

With his poll numbers at new lows amid voter frustration with 9.1 per cent unemployment, Obama will make tax cuts for middle-class households and businesses the centrepiece of the plan and will press for new spending to repair roads, bridges and other deteriorating infrastructure.

He will use his televised speech before a joint session of the US Congress, at 7pm EDT (2300 GMT), to urge passage of his "American Jobs Act" by year-end.

If it succeeds, his plan might provide an economic boost quickly enough to help Obama's re-election prospects. If it fails, his strategy will be to paint congressional Republicans as obstructionist and blame them for the stagnating economy.

Already on Thursday morning, White House Chief of Staff Bill Daley went on the offensive against what he described as a do-nothing climate on Capitol Hill.

"It's time for Congress, after a five-week vacation, to come back and do something and not just say 'no' to everything that gets proposed in this town," Daley said on CBS.

Surprisingly weak jobs data has heightened fears that the United States may be headed for another recession. The Federal Reserve is considering ways to bolster demand and G7 finance ministers meeting in France on Friday are expected to encourage countries that can afford it to do more to help growth.

Obama is under intense pressure to change perceptions that he has shown weak leadership.

His economic stewardship has been criticized by both Republicans and fellow Democrats, casting a cloud over his prospects for re-election in November 2012.

"It's a major leadership moment for Obama," said Terry Madonna, a political scientist at Franklin and Marshall College in Lancaster, Pennsylvania. "He's running out of months before voters settle in on whether his presidency has failed."

An NBCWall Street Journal poll this week showed Obama was no longer the favorite to win next year.

The White House said Obama will describe in stark terms the difficulties the US economy faces and argue Washington must do all it can to help the labor market heal -- a message he will press throughout the autumn as the 2012 race heats up.

A renewal of payroll tax cuts for workers passed last December and tax cuts to encourage businesses to hire are the biggest elements of the jobs plan. Media reports have estimated the package will cost $300 billion or more.

Obama will send the jobs proposals in legislative form to Congress next week, White House senior adviser Valerie Jarrett told Reuters Insider. She said Thursday's speech was designed to encourage "shared responsibility" for the economy's woes.

"It's not just up to the president. It's up to Congress, it's up to the business community, it's up to the American people. Everyone has to get involved in this," she said.

The White House goal is to get legislation passed this year to make a dent in unemployment by spring 2012.

To bolster his chances for re-election, Obama needs to be able to point to economic improvement by the middle of next year.

If Congress, which controls the nation's purse strings, does not act, the White House is prepared to paint Republicans as obstructing his efforts to solving the jobless problem.

The bruising battle in July over the country's debt levels that led to a Standard & Poor's ratings downgrade highlighted a wide chasm between Obama's Democrats and Republicans who control the House of Representatives.

Republicans have derided an $800 billion economic stimulus package that Obama pushed through Congress in 2009 as wasteful spending and want immediate cuts in the deficit. Democrats say that while long-term deficits must be trimmed, the economy needs a short-term fiscal boost.

The White House has said the jobs package will be paid for with cuts in the future but offered no details. Obama will push the congressional "super committee" that met for the first time on Thursday to go beyond its goal of finding $1.2 trillion in budget savings, but is not due to lay out his recommendations until next week or later.

In a sign of conciliation, House Republican leaders John Boehner and Eric Cantor have signaled they were open to some infrastructure spending and to a programme Obama will pitch in his jobs plan to help train unemployed workers.

But Mitch McConnell, the top Republican in the Senate, said the president's attempt to accuse those who don't support his ideas of being overly partisan was a political smokescreen.

"There is a much simpler reason to oppose the president's economic policies that has nothing whatsoever to do with politics -- they simply don't work," he said. "This isn't a jobs plan, it's a re-election plan."

Some congressional Republicans were expected to avoid attending Obama's evening address.