Obama: US must reclaim values of fairness for all

WASHINGTON (AP) – President Barack Obama is pledging an economic revival that will work for everyone and not just the rich, declaring that “the defining issue of our time” is the endangered promise of the American dream. He’s using his State of the Union address Tuesday night to draw a battle line with Republicans over how to avoid a nation of haves and have-nots.

In excerpts of his speech released in advance, Obama attacked income inequality and offered an economic agenda built upon boosting manufacturing, energy and education. He will call for requiring the rich to pay more in taxes and try to appeal to the independent voters and frustrated masses whose support he needs to keep his job.

Obama was making his pitch to a bitterly divided Congress and to a country underwhelmed by his handling of the economy. Targeting anxiety about a slumping middle class, Obama was underlining every proposal with the idea that hard work and responsibility still count.

“No debate is more important,” Obama said in the excerpts released by the White House ahead of the 9 p.m. EST speech.

“We can either settle for a country where a shrinking number of people do really well while a growing number barely get by. Or we can restore an economy where everyone gets a fair shot, everyone does their fair share and everyone plays by the same set of rules,” the president said.

He warned Republicans in Congress that he will fight them if they try to obstruct him or restore an economy gutted by “outsourcing, bad debt and phony financial profits.”

Republicans weren’t impressed.

Indiana Gov. Mitch Daniels, offering the formal GOP response, called Obama’s policies “pro-poverty” and his tactics divisive.

“No feature of the Obama presidency has been sadder than its constant efforts to divide us, to curry favor with some Americans by castigating others,” Daniels said in excerpts released before the address.

Senate Minority Leader Mitch McConnell, speaking ahead of the president’s speech, said: “It’s hard not to feel a sense of disappointment even before tonight’s speech is delivered. The goal isn’t to conquer the nation’s problems. It’s to conquer Republicans. The goal isn’t to prevent gridlock, but to guarantee it.”

Steeped in American tradition, the State of the Union has become a night of political theater watched by tens of millions of Americans. And this year, the one time when Obama is delivering the address while also campaigning for re-election, the speech amounts to his biggest, best case to spell out his vision for another four years.

The economy dominates.

For an incumbent on the attack about income inequality, the timing could not be better.

Ahead of Obama’s speech, Republican presidential contender Mitt Romney released his tax returns under political pressure, revealing that he earned nearly $22 million in 2010 and paid an effective tax rate of about 14 percent. That’s a lower rate than many Americans pay because of the way investment income is taxed.

Obama, though, has his own considerable messaging challenges three years into his term.

The economy is improving, but unemployment still stands at the high rate of 8.5 percent. More than 13 million people are out of work. Government debt stands at $15.2 trillion, a record, and up from $10.6 trillion when he took office. Most Americans think the country is on the wrong track.

Obama’s relations with Republicans in Congress are poor, casting huge doubt on any of his major ideas for the rest of this year. Republicans control the House and have the votes to stall matters in the Senate, although Obama has tried to take the offensive since a big jobs speech in September and a slew of executive actions ever since.

Despite the political atmosphere in Washington, the scene is expected to have at least one unifying touch. Outgoing Rep. Gabrielle Giffords, who survived an assassination attempt a year ago, is expected to attend with her colleagues. Her husband, former astronaut Mark Kelly, was attending as a guest of first lady Michelle Obama.

Obama’s tone was under as much scrutiny as his proposals.

He was aiming to find all the right balances: offering outreach to Republicans while sharpening his competing vision, outlining re-election themes without overtly campaigning and pledging to work with Congress even as he presses a campaign to act without it.

The context was set not just by the re-election year, but by the awful past year of partisan breakdowns in Washington. The government neared both a shutdown and, even worse, a default on its obligations for the first time in history.

Less than 10 months before Election Day, the presidential race is shaping up as a contest between unmistakably different views of the economy and the role of government.

Obama is campaigning on the idea of helping people at least get a fair shot at a job, a house, a career and a better life. Republicans say he and his philosophy have become a crushing burden on free enterprise and that the president is resorting to what amounts to class warfare to get elected again.

He was to unveil new proposals to address the housing crisis that has left many people trapped, and he planned to promote steps to make college education more affordable.

The president was planning a traditional rundown on the state of American security and foreign policy – and a reminder that he kept a promise to end the Iraq war.

But his driving focus was to secure faith in the economic recovery and in voters’ confidence that he is getting the country on the right path.

Obama planned to renew his call for his “Buffett rule” – a principle that millionaires should not pay a lower tax rate than typical workers. While middle-income filers fall in the 15 or 25 percent bracket, and millionaires face a 35 percent tax bracket, those who get their income from investments – not a paycheck – pay 15 percent.

The president named his idea after billionaire Warren Buffett, who says it is unfair that his secretary pays a higher tax rate than he does. The White House invited Buffett’s secretary, Debbie Bosanek, to attend the State of the Union as a special guest.

And then for three days following his speech, Obama will promote his ideas in five swing-voting states.. On Wednesday he’ll visit Iowa and Arizona to promote ideas to boost American manufacturing; on Thursday in Nevada and Colorado he’ll discuss energy, and in Michigan on Friday he’ll talk about college affordability, education and training.

Polling shows Americans are divided about Obama’s overall job performance but unsatisfied with his handling of the economy.

BEN FELLER AP White House Correspondent

(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)