Obama to Push New Spending in State of the Union - WSJ.com

Obama to Push New Spending in State of the Union - WSJ.com: "President Barack Obama will call for new government spending on infrastructure, education and research in his State of the Union address Tuesday, sharpening his response to Republicans in Congress who are demanding deep budget cuts, people familiar with the speech said.

Mr. Obama will argue that the U.S., even while trying to reduce its budget deficit, must make targeted investments to foster job growth and boost U.S. competitiveness in the world economy. The new spending could include initiatives aimed at building the renewable-energy sector—which received billions of dollars in stimulus funding—and rebuilding roads to improve transportation, people familiar with the matter said. Money to restructure the No Child Left Behind law's testing mandates and institute more competitive grants also could be included.

While proposing new spending, Mr. Obama also will lay out significant budget cuts elsewhere, people familiar with the plans say, though they will likely fall short of what Republican lawmakers have requested.

In arguing that U.S. competitiveness is at stake, Mr. Obama plans to use his nationally televised speech to try to frame the spending debate with Republicans that is expected to dominate Congress in the coming months. 'We seek to do everything we can to spur hiring and ensure our nation can compete with anybody on the planet,' Mr. Obama said Friday after touring a General Electric Co. plant in Schenectady, N.Y. He cited clean-energy manufacturing, infrastructure and education as keys to competitiveness.

Previewing the expected theme of his speech, Mr. Obama on Friday appointed GE Chief Executive Jeffrey Immelt to lead a new President's Council on Jobs and Competitiveness.

Commenting on the new advisory panel, Senate Minority Leader Mitch McConnell (R., Ky.) said that unless its 'first recommendations are to reverse the damage the policies of the last two years have done to the business climate, job creation and the exploding national debt, I fear it will do more to create good public relations for the White House than good jobs for struggling Americans.'

Republicans are casting the White House's pivot toward competitiveness as an excuse for bigger government and more spending. They say a surge in federal spending and a $1.3 trillion budget deficit are impeding job creation, and dramatic spending cuts are needed immediately.

In the House, Republicans are pushing to cut $100 billion from the annual budget as soon as this year. A coalition of House Republicans proposed Thursday cutting $2.5 trillion in spending over a decade, pushing nondefense discretionary spending down to 2006 levels for 10 years.

'Today's the day we finally stop kicking the can down the road,' Rep. Jeff Flake (R., Ariz.) said as the proposal was introduced Thursday.

White House officials have said that spending cuts of the magnitude proposed by Republicans could stall the economic recovery. Still, Mr. Obama is expected to pair his calls for investment with an admonition that the country must embark on targeted spending cuts. Late last year, he called for a two-year wage freeze for all federal civilian employees to save $5 billion. He's expected to push for spending cuts on Tuesday, particularly in duplicative or dysfunctional federal programs.

Details of those cuts couldn't be learned Friday evening. Programs he has gone after in the past include agricultural subsidies, defense programs such as C-17 military transport planes, and an alternate engine for the Pentagon's Joint Strike Fighter.

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