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2010-01-26 10:09:17
By Alister Bull and Caren Bohan Alister Bull And Caren Bohan . Mon Jan 25, 10:32 pm ET
WASHINGTON (Reuters) . President Barack Obama, concerned by voter anxiety over high unemployment, said on Monday he would use his State of the Union speech on Wednesday to reassure Americans worried about jobs and the economy.
"We're going to talk about how we can first of all, focus on job creation and growth," Obama said in an interview with U.S. television network ABC.
"There are going to be a set of proposals that we put forward that help to stabilize the situation and deal with the growing insecurity and anxiety of people who, even if they haven't lost their job, are still feeling squeezed by their incomes shrinking and their costs going up."
Obama's first State of the Union speech at 9 p.m. EST on Wednesday (0200 GMT on Thursday) will give him a chance to set the tone and priorities for his second year in office.
He is trying to balance the need to further boost the economy with the necessity of reining in the U.S. budget deficit, which soared to $1.4 trillion in 2009.
Faced with voter anxiety over high unemployment and growing budget deficits, Obama's fellow Democrats are at risk of big losses in congressional elections in November. They suffered an embarrassing defeat in a special Senate election last week in Massachusetts.
Under pressure from deficit hawks, Obama will seek a three-year freeze on domestic spending excluding U.S. security in his 2011 budget that would save $250 billion by 2020, aides said on Monday.
Obama will outline the spending hold-down in his State of the Union address and will spell it out in detail on February 1, when he unveils his second budget.
The 2010 budget allocated $447 billion to non-security discretionary spending, or about one-eighth of the overall budget. Agencies that could feel the pinch include the Commerce, Interior, Justice and Labor departments, as well as the Environmental Protection Agency.
But Obama told ABC News there were no "magic solutions" to the deficit. The problem would require "slow chipping away" and Democratic and Republican cooperation," he said.
Obama's rhetoric has taken a populist turn in recent weeks and he is expected to tap into voter frustration over the economy in his State of the Union speech.
EROSION OF SUPPORT
"Creating good sustainable jobs is the single most important thing that we can do to rebuild the middle class," Obama said earlier on Monday in unveiling proposals to expand a child-care tax credit and encourage savings to demonstrate his concern for middle-class families.
A year into his presidency, Obama and his Democratic Party have witnessed an erosion of support among middle-class Americans who swept him into office. He has responded with a tougher line against Wall Street and excessive executive bonuses.
The Middle Class initiatives he announced on Monday were developed by the White House Task Force on Middle Class Families, led by Vice President Joe Biden. The proposals would:
Knowing Obama will discuss the deficit on Wednesday night, conservative-leaning Democrats in the House of Representatives, known as the Blue Dogs, outlined a plan to Reuters on Monday of deficit-cutting measures that aims to balance the budget within 10 years and stabilize the national debt.
The 54 centrist members of the coalition could play a large role this year as nervous Democrats try to position themselves ahead of the November elections as responsible stewards of taxpayer money.