President Barack Obama said spending to rebuild the nation'sinfrastructure is a key component of his plan to reignite theeconomy and boost hiring.

In a speech marking the U.S. Labor Day holiday, Obama told aMetro Detroit Central Labor Council rally today that the jobsagenda he'll unveil in a speech to Congress on Sept. 8 will includeproposals that previously have had support from both parties,including putting people back to work by repairing roads andbridges.

The president challenged Republicans in Congress to get behindmeasures to create jobs, including tax breaks to spur hiring.

“We've got a lot more work to do to recover fully from thisrecession,” Obama said. The speech to Congress will lay out “a newway forward” for an economic recovery, he said.

Obama will unveil his new jobs agenda as unemployment remains at9.1 percent more than two years after the recession's official end.The sluggish recovery from the worst recession since the GreatDepression will be central issues as Obama runs for re-electionnext year. Republicans, who control the U.S. House, have signaledresistance to new spending that would add to the federal budgetdeficit.

While saying today he didn't want to give too much away abouthis speech to lawmakers because he wanted people to “tune in,”Obama added he'd give “just a little bit” and called forinfrastructure spending.

Roads and Bridges
“We've got roads andbridges across this country that need rebuilding,” he said. “We'vegot more than 1 million unemployed construction workers ready toget dirty right now. There is work to be done and there are workersready to do it. Labor's on board, business is on board. We justneed Congress to get on board.”

Obama also said he'll ask Republicans to “prove you'll fightjust as hard for tax cuts for middle class” Americans as they havefor measure benefiting the wealthy and oil companies. “The time foraction is now,” he said.

Jobs Speech
Before leaving for Detroit, Obamaspent the weekend at Camp David, the presidential retreat inMaryland, putting the finishing touches on his address toCongress.

“The things that he's talking about are some things that havebeen supported in the past by Republicans and Democrats,” LaborSecretary Hilda Solis said this morning on NBC's “Today” program.Those include “infrastructure investment, helping to provideassistance to those dislocated workers, people who are out of work,who've been out of work for more than six months and longer, andalso providing tax breaks for middle-class people, payroll taxes,and for businesses,” she said.

Today's visit to Michigan follows a Sept. 2 Labor Departmentreport that showed payrolls unexpectedly stalled last month. Themedian forecast in a Bloomberg News survey had called for a rise of65,000.

The unemployment rate in Michigan was 10.9 percent in July,higher than the national average and down from a high of 14.1percent in September 2009. The White House in June released areport that said that the $80 billion bailout of the auto industryand the emergence of General Motors Co. and Chrysler Group LLC frombankruptcy saved at least 1 million jobs. The administrationestimates that the aid will cost taxpayers about $14 billion.

Obama highlighted the rescue of GM and Chrysler plants in hisspeech today, saying, “I've seen Detroit prove the cynics and thenaysayers wrong.”

Labor's Push
Labor groups are pressing Obamato seek major spending on infrastructure to create jobs. Unionswere disappointed in Obama's agreement with Republicans lastDecember that extended Bush-era tax cuts for all Americans,including the wealthiest, and in the continuing efforts to cutfederal spending by $2.4 trillion.

“I'm hoping that he'll be very bold” in his jobs' proposal,AFL-CIO president Richard Trumka said of Obama last week onBloomberg Television's “Political Capital with Al Hunt.”

“American workers, whether they're union or not union, arelooking for leadership,” he said. “They don't want excuses. Theydon't want bipartisan crap.”

Trumka and Solis joined Obama at the rally today.

Concern over the economy has increased as growth weakened duringthe first half of the year to its slowest pace of the recovery.U.S. stock futures fell, indicating that the Standard & Poor's500 Index may slide for a third day when trading reopens tomorrow,amid concern the world's largest economy is weakening.

Obama's Pivot
Since Congress resolved amonths-long partisan standoff over the national debt limit byraising it on Aug. 2, Obama has pivoted to a public focus onboosting job growth. He spoke about jobs on a three-day bus tourthrough the Midwestern states of Minnesota, Iowa and Illinois,beginning Aug. 15.

Obama has spent much of the year pressing Congress to act on afamiliar set of plans: renewal of a two-percentage-point cut in theemployee-paid portion of the payroll tax and extended unemploymentbenefits, which are both scheduled to expire on Dec. 31;establishment of an infrastructure bank to fund public worksspending; ratification of free-trade deals; and overhauling patentlaw. Obama has said those will remain priorities.

Recent signs of economic weakness have led private economists toraise forecasts for the unemployment rate next year. The medianforecast for unemployment during next year's fourth quarter, whenthe presidential election will be held, is 8.5 percent, accordingto 51 economists surveyed by Bloomberg News Aug. 2 through Aug.10.

Since World War II, no U.S. president has won re-election with ajobless rate above 6 percent, with the exception of Ronald Reagan,who faced 7.2 percent unemployment on Election Day in 1984. Thejobless rate under Reagan had come down more than 3 percentagepoints during the prior two years.

Bloomberg News

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