Obama to unveil economic plan in September speech

Reuters: President Barack Obama said on Wednesday he will propose a plan in September to jump-start the U.S. economy as he struggles to convince skeptical voters that he has something new to offer.

Obama, with his approval ratings falling, is set to propose short-term measures to boost hiring and call on a congressional panel to deliver more than the $1.5 trillion in savings by Nov. 23, partly through increased tax revenue.

“When Congress gets back in September, my basic argument to them is this: we should not have to choose between getting our fiscal house in order and jobs and growth. We can’t afford to do just one or the other, we’ve got to do both,” Obama said at a town-hall style meeting in Illinois.

The White House offered scant details on what new initiatives Obama would offer to keep the economy from diving back into recession.

In a television interview, Obama said another recession was unlikely but expressed concern about the slow pace of growth.

“I don’t think we’re in danger of another recession, but we are in danger of not having a recovery that is fast enough to deal with a genuine unemployment crisis for a whole lot of folks out there,” he said in excerpts in a CBS interview airing on Sunday. “And that’s why we need to be doing more.”

A Gallup poll published on Wednesday found a new low of 26 percent of Americans approve of Obama’s handling of the economy, down 11 percentage points since mid-May.

Administration officials said September’s economic plan was still a work in progress but new measures could include tax breaks and spending through construction projects.

Obama’s insistence that higher taxes be a part of any long-term effort to improve America’s fiscal health and his push to spend more now to bolster the labor market could mean his proposals go nowhere.

But while both parties remain deeply divided, there may be a new opening for Republicans and Democrats to compromise.

Intense public anger over the debt-limit fight, growing pressure from Big Business to tackle deficits and even consider tax hikes, data showing surprising economic weakness, a wildly gyrating stock market and the loss of America’s AAA debt rating could force both sides off their unyielding positions.

Still, Republicans, intent on making Obama a one-term president, repeated opposition on Wednesday to new taxes and criticized the suggestion of new economic stimulus spending.

“Quit borrowing. Quit spending. Quit trying to raise taxes,” said Senate Republican Leader Mitch McConnell.

House Speaker John Boehner, the top Republican in Congress, said the president needed to do more than fluff up tired ideas in his speech without a clear plan of how to help the economy.

“To get our economy moving, what the American people need from the president is leadership and serious solutions that reflect a true change in his approach to our economy and the role of government,” Boehner said.

Any failure of Obama’s plan could play into his hands politically as he tries to convince voters that Republican refusal to compromise is to blame for America’s fiscal and economic mess.

Obama’s Democrats control the Senate and Republicans control the House of Representatives.

Obama faces serious doubts about his economic leadership in the wake of the first U.S. credit rating downgrade and with unemployment stuck above 9 percent, a major impediment to his re-election prospects next year.

He has been criticized in recent weeks by political opponents, allies on the left and Wall Street. Republicans say he has no plan to reduce unemployment while some Democrats say he has not been aggressive enough in promoting the need for stimulus spending to keep the economy moving.

“The president has to make a strong case to the American people and go up against his opponents,” said Dan Seiver, professor of finance at San Diego State University. “He is a great compromiser but it hasn’t served him so well in the past six months.”

Obama was wrapping up a three-day campaign-style bus tour through the Midwest on Wednesday during which he has sought to convince voters that Republican refusal to compromise was to blame for America’s fiscal and economic mess.

After the Labor Day holiday, the president will also lay out a long-term deficit-reduction package that is based on the $4 trillion “grand bargain” he tried to broker with Boehner to avert default on U.S. debt, administration officials said.

That agreement would have imposed roughly $3 trillion in spending cuts -- including curbs on social programs such as Medicare, the health insurance program for the elderly -- and $1 trillion in revenue increases, mostly through tax reform.

Those talks failed and Congress forged a lesser deal that created a powerful 12-member congressional panel given the task of finding up to $1.5 trillion or more in savings to tackle the deficit. If it does not agree on at least $1.2 trillion in savings, automatic spending cuts that hit a wide range of government programs would be triggered.