By Nicholas Johnston and Edwin Chen Jan. 27 (Bloomberg) — President Barack Obama vowed to press ahead with his plan to overhaul the nation’s health-care system and called on Congress to pass a package of tax cuts and spending to stimulate the economy and create jobs. Obama, delivering his first State of the Union address, said the government also must tackle the federal budget deficit , forecast to be $1.35 trillion this year, and set aside the “tired battles” that have consumed Washington for years and threaten to leave the U.S. behind nations such as China in global competition. “I do not accept second-place for the United States of America,” Obama said. “As hard as it may be, as uncomfortable and contentious as the debates may become, it’s time to get serious about fixing the problems that are hampering our growth.” Obama’s speech tonight before a joint session of Congress and a national television audience was devoted mostly to economic concerns, particularly the loss of more than 7 million jobs since the start of the recession in December 2007. Many of the steps he outlined repeated initiatives he’s proposed previously. “Jobs must be our number one focus in 2010, and that is why I am calling for a new jobs bill tonight,” Obama said. Tax Breaks He called for an extension of tax incentives worth $38 billion over this year and next to encourage businesses to accelerate equipment purchases and elimination of capital gains taxes on small business investments. For individuals and middle- income families, Obama proposed an increased tax credit for child care and an expansion of tax credits to match retirement savings. He also defended the government bailouts of banks such as New York-based Citigroup Inc. and automakers General Motors Co. headquartered in Detroit and Auburn Hills, Michigan-based Chrysler Group LLC as necessary to prevent the collapse of the economy, even if it was broadly unpopular. “If there’s one thing that has unified Democrats and Republicans, it’s that we all hated the bank bailout,” Obama said. “I hated it. You hated it. It was about as popular as a root canal.” Obama said the government should use $30 billion of the money paid back by banks that were bailed out with the Troubled Asset Relief Program to assist community banks that give lend to small businesses. Republican Response The president’s focus on economic issues will be echoed by the Virginia Governor Bob McDonnell in the Republican response. McDonnell, who was elected last November and sworn-in earlier this month, will call for policies that promote entrepreneurship and innovation to make the U.S. more competitive globally, and will say lawmakers must lower the federal debt because it’s on an unsustainable path. “What government should not do is pile on more taxation, regulation, and litigation that kill jobs and hurt the middle class,” McDonnell says in the text of his remarks. Obama also laid out plans to rein in the federal deficit, such as a freeze of discretionary spending in the federal budget over three years. Defense and other national security-related agencies won’t be affected and some discretionary programs, such as education, will get increases. To take further action, he said he would set up by executive order a commission to recommend steps to cut the deficit. Drive on Health Care While his effort to overhaul the U.S. health-care system has gotten snagged in Congress, Obama vowed to press ahead. The president said he recognized that the issue has been divisive and said he shared some of the blame for not clearly explaining how it would benefit average Americans. “By the time I’m finished speaking tonight, more Americans will have lost their health insurance,” Obama said in the text. “I will not walk away from these Americans. And neither should the people in this chamber.” Obama said years of partisan battles over issues important to people and the growing influence of lobbyists have sown “deep and corrosive doubts” about the federal government. “We have to recognize we have more than a deficit of dollars right now. We have a deficit of trust,” Obama said in his text. To rebuild public trust, Obama called for rules requiring lobbyists disclose each contact they make on behalf of clients and limit their contributions to candidates for federal office. Campaign Finance He also asked Congress to draft legislation in response to a U.S. Supreme Court ruling last week that allows corporations and labor unions to make campaign donations, and require that all special spending requests made by lawmakers, known as earmarks, should be posted on a single Web site before being voted on. Obama had tough words for Democrats as well as Republicans in Congress over the deadlock that has held up action. He rejected the approach of “some on the right” that the path to prosperity was through tax cuts for the wealthy, elimination of regulations and leaving the health-care system as it is. “That’s what we did for eight years,” Obama said, in reference to his predecessor, Republican President George W. Bush . “That’s what helped lead us into this crisis. It’s what helped lead to these deficits.” He said his fellow Democrats can’t be paralyzed by fear of losing the next election. “I would remind you that we still have the largest majority in decades, and the people expect us to solve some problems, not run for the hills,” Obama said. —-With assistance from Roger Runningen , Julianna Goldman , Kate Anderson Brower , Holly Rosenkrantz and Angela Greiling Keane in Washington. Editors: Joe Sobczyk , Jim Kirk . To contact the reporters on this story: Nicholas Johnston in Washington at njohnston3@bloomberg.net ; Edwin Chen in Washington at EChen32@bloomberg.net ;
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Obama Says Jobs Are `Number One Focus,’ Vows to Advance Health-Care Reform
