Manitowoc - President Barack Obama went to the United States heartland on Wednesday to promote his agenda of investing to create jobs while reining in spending, a recipe Republicans say is unworkable.
Underlining the enormity of the task, the Congressional Budget Office - the day after Obama's nationally televised State of the Union address - said the US deficit will reach $1.48-trillion this year, 40 percent higher than it had forecast.
The rise is mostly due to December's extension of tax cuts put in place under former president George W. Bush.
This sobering reminder followed Obama's prime-time balancing act in which he struck a conciliatory tone toward newly empowered congressional Republicans. His retooled, business-friendly approach is aimed at moving to the political centre, which may be crucial to his 2012 re-election chances.
In Wisconsin, a political battleground state he won in the 2008 presidential election, Obama visited renewable energy firm Orion Energy Systems in Manitowoc to drive home his message of innovation and job creation.
“China's making these investments and they have already captured a big chunk of the solar market, partly because we fell down on the job. We weren't moving as fast as we should have. Those are jobs that could be created right here that are getting shipped overseas,” Obama told workers.
Republicans, who routed Obama's Democrats in the November congressional elections, said he did not go far enough on Tuesday night in embracing fiscal restraint. Obama will have a fight on his hands over his budget plan to be presented in February.
In a bid to show he has fiscal discipline, Obama proposed a five-year freeze in some domestic spending, which he said would cut $400-billion from budget deficits over a decade, a move applauded by US debt and stock traders.
He alluded to the need to cut spending again on Wednesday, as he said “winning the future” for the United States also meant “doing what we try to do in our own lives by taking responsibility for our deficits by cutting wasteful, excessive spending wherever we find it”.
Republicans seeking $100-billion in cuts this year to help get the United States on a sounder fiscal footing called Obama's plans for a spending freeze too little, too late.
“There's got to be some kind of absolute iron-clad path to getting (spending) down,” Republican Senator John McCain said on ABC's Good Morning America programme on Wednesday.
Obama walked a fine line in Tuesday's speech.
“Basically, what I heard were a lot ideas to raise spending followed by ideas to cut spending. You can't have it both ways,” brokerage house employee Bryan Hofferica, 32, said in Chicago.
Obama offered proposals that would potentially appeal to the Republicans, who now control the House of Representatives and have gained in the Senate - a corporate tax cut, reform of the tax code and an end to lawmakers' pet spending projects.
World stocks rose and the dollar hit a two-month low against the euro after Obama's promise to cut spending cemented expectations that the US Federal Reserve will retain faith in its loose-money policy.
US stocks rose after Obama's call for a lower corporate tax rate.
Republicans have threatened to obstruct efforts in Congress to raise the national debt ceiling by the time it hits a statutory limit of $14.3-trillion by March 31. The country could default on its debt, causing financial havoc, if the limit is not increased.
Republican insistence on maintaining tax cuts even for the richest Americans is complicating Obama's attempt to close the fiscal gap. - Reuters