Last updated: September 8, 2011 5:08 am

Obama set to unveil jobs strategy

Barack Obama is preparing to turn up the heat on his political rivals with an ambitious speech on Thursday and a jobs package worth an estimated $300bn, making a calculated bet that Republicans are feeling even more pressure on the economy than he is.

According to Democratic officials familiar with the US president’s plans, Mr Obama will present himself as the defender of the nation’s struggling middle class and will make an urgent call for Congress to act on proposals that he will argue will immediately create jobs.

The plan is expected to include an extension of tax relief for workers, a short- and long-term infrastructure proposal that will centre on fixing schools and aid for the unemployed and cash-strapped states.

The officials said the plan would be paid for with future savings and that the president would also address deficit reduction and the country’s long-term fiscal outlook.

Underlying Mr Obama’s pitch is the view within the White House that as difficult as the summer was politically, the president emerged from the contentious debt ceiling debate in a better position than the Republican-controlled House of Representatives.

As he seeks to sell his jobs plan to reluctant Republicans, Mr Obama will hammer them, officials say, on the idea that the party is catering to the extreme right of its base.

The White House viewed a letter Republicans sent to Mr Obama this week as more conciliatory and open to compromise than in the past and this was taken as a possible signal that Republicans are feeling the heat.

Although it has been unclear so far how Mr Obama’s jobs plan will correlate with separate negotiations to cut US deficits by $1,200bn, Democratic officials suggested that the White House sees the congressional “super committee” tasked with agreeing to the new savings package as a vehicle for implementing its job creation plans.

But there are grave doubts whether Mr Obama, who is facing record-low poll numbers, can sustain the momentum necessary to force the Republicans’ hand, particularly because he has appeared to have been outmanoeuvred by his rivals in the past.

One senior Democratic aide in the Senate said he did not believe Republicans felt enough pressure from voters to do anything that the president requested. “They feel some pressure to pay lip service to jobs but all that means to them is advancing the things that are already their priorities,” the aide said, citing free trade agreements and tax and regulatory reform. “It’s nothing that would actually make a difference or be stimulative.”

Although the White House has kept details of Mr Obama’s speech largely under wraps, analysts and people who have been in talks with the president’s team believe that the cornerstone of the jobs proposal will be an extension of a payroll tax cut, which benefits working Americans and is due to expire at the end of this year.

Republicans have concerns about the measure, which costs $110bn a year, but it is unclear whether conservative lawmakers will mount strong opposition to a tax cut.

There is also likely to be a big push on infrastructure spending. One proposal that appeared to be gaining traction in Washington would be to repair and modernise state schools at a cost estimated at $40bn to $50bn.

According to people who have been studying the White House’s options, Mr Obama’s proposal is also likely to include measures that would directly boost cash-strapped states and local governments.

States and municipalities have been forced this year to slash employee numbers.

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