Obama to Stress U.S. Economy, Job Creation, Deficit Reduction in Speech

President Barack Obama said tomorrow’s State of the Union address will focus on cutting the deficit, reducing unemployment and ensuring the U.S. can compete with economic rivals.

In a video to supporters that previews the nationally televised Jan. 25 speech, Obama said the economy is growing, corporate profits are rising and more than 1 million jobs have been created in the past year.

Obama said he will be pivoting from responding to the financial crisis that occupied much of the first two years of his presidency to meeting longer-range economic challenges.

“My principal focus, my number one focus, is going be making sure that we are competitive, that we are growing, and we are creating jobs not just now but well into the future,” Obama said in the video, released over the weekend. “I’m focused on making sure the economy is working for everybody, for the entire American family.”

The need to make the U.S. more competitive with emerging economies such as China and India has been part of the president’s focus since his trip to Asia last November.

Sputnik Moment

During a Dec. 6 speech in Winston-Salem, North Carolina, Obama said the nation faces a “Sputnik moment” -- a reference to the Soviet Union’s launch of the first satellite in 1957, ahead of the U.S.

Photographer: Joshua Roberts/Bloomberg

U.S. President Barack Obama. Close

U.S. President Barack Obama.

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Photographer: Joshua Roberts/Bloomberg

U.S. President Barack Obama.

Obama hosted a state visit last week from Chinese President Hu Jintao, the leader of a nation viewed as both an economic rival and a promising export market. Obama also named General Electric Co. Chief Executive Officer Jeffrey Immelt to head a group of outside advisers called the President’s Council on Jobs and Competitiveness.

With more than half of GE’s revenue coming from outside the U.S., Obama said Immelt “understands what it takes for America to compete in the global economy.”

In the video, Obama said that to maintain a competitive edge, the U.S. must stay the most “dynamic economy in the world” and make sure that future generations can “compete with workers anywhere in the world.”

“Now to do that, we’re going to have to out-innovate, we’re going to have to out-build, we’re going to have to out- compete, we’re going to have to out-educate other countries,” Obama said. “That’s our challenge.”

“The president obviously got the message from the November election,” said Senate Republican leader Mitch McConnell said on the “Fox News Sunday” program. “He’s stopped bashing business and has started celebrating business. It’s about time.”

Political Division

Despite the longest stretch of unemployment rates above 9 percent since monthly records began in 1948, American businesses and investors have prospered since Obama took office. The Standard & Poor’s 500 Index has risen more than 50 percent since his inauguration, and U.S. corporate profits reached a record in the third quarter of 2010.

With Republicans newly in control of the House of Representatives, the Democratic president urged both parties to find common ground on economic and security issues “even as we’re having some very vigorous debates.”

“He’s got a real chance to lead here,” House Majority Leader Eric Cantor said on NBC’s “Meet the Press” program. “The question is, did he listen and has he learned from the last election,” the Virginia Republican said.

McConnell, a Kentucky Republican, said on Fox that while his party will look at any proposed increases in education, research and infrastructure, “I don’t think anything ought to be off limits in the effort to reduce spending.”

“Anytime they want to spend, they call it ‘investment,’” McConnell said. “You will hear the president talk about investing a lot.”

Lower Corporate Taxes

Obama may support lowering the U.S. corporate-tax rate and should advance trade deals with Colombia, Panama and South Korea, McConnell said.

“To the extent he actually wants to do some of these things, our answer is going to be yes,” McConnell said.

One of the Obama administration’s biggest challenges is reducing the more than $1.2 trillion U.S. budget deficit. Obama didn’t indicate how he would address the recommendations from his bipartisan deficit commission, including a proposal to cut Social Security benefits.

“We’re also going to have to deal with our deficits and our debt in a responsible way,” Obama said. “And we’ve got to reform government so that it’s leaner and smarter for the 21st century.”

‘Laser-focused’

Democratic Senator Richard Durbin said on Fox today, “We can’t be so laser-focused on the deficit that we ignore the obvious, that we are still in a recession.”

Obama’s job-approval ratings have been climbing since the November election in which the Republicans took control of the U.S. House and reduced the Democratic majority in the Senate.

In a Wall Street Journal/NBC News poll conducted Jan. 13- 17, after Obama spoke at a memorial service in Tucson, Arizona, urging a more civil political discourse, his job approval reached 53 percent. Among independents, positive views of his performance surpassed negative views for the first time since August 2009.

To contact the reporters on this story: Julianna Goldman in Washington at jgoldman6@bloomberg.net; Elliot Smith in Washington at esmith29@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net.

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