WASHINGTON, Sept 8 – US President Barack Obama will push billions of dollars in new business tax incentives and spending on big construction projects today, as he tries to convince a balky Congress to pass measures intended to spur the economy and create jobs.

Obama will travel to Ohio to tout programmes that include accelerating US$200 billion (RM622.20 billion) in business tax write-offs, which the White House says would eventually cost just US$30 billion, an infrastructure spending boost of at least US$50 billion, and increasing and permanently extending a tax credit for research and development costing US$100 billion over 10 years.

In what aides made clear will be a strongly political speech, Obama will couch his economic plans as an expression of his values, favouring the middle class over the wealthiest Americans and big corporate interests such as oil and gas companies.

The White House pitches the plans as essential to get the economy moving again and set the stage for long-term economic growth, but they cannot pass without support in Congress from Republicans, who are far outnumbered in the House of Representatives and Senate by Obama’s fellow Democrats but still able to block legislation.

With polls showing Republicans favoured to cut into or even eliminate Democratic majorities in Congress in November elections, the minority party has little motivation to give Obama a win. Republican leaders also express wariness about any more spending, in the face of massive budget deficits, instead favouring more tax cuts and reduced spending.

In another divide with the opposition, Obama will also stress that he will not ease his opposition to extending tax cuts for the wealthiest Americans enacted under his Republican predecessor, George W. Bush, which Republicans favour.

Democrats want to extend only the cuts for those making US$250,000 a year or less, but Republicans want to extend them for the wealthy as well and are calling expiration of the tax cuts this year a tax increase.

“There is no doubt that we strongly believe that a healthy, vibrant, economically viable middle class is key to economic recovery and we strongly support the extension of tax cuts to the middle class,” an administration official told reporters, speaking on condition of anonymity in order to speak freely.

“... But it’s also true that we don’t have 700 billion additional dollars to borrow to pay for tax cuts that essentially will go to millionaires ... Saving that US$700 billion and applying that to the deficit is a much better use of that money, so that is a values statement,” he said.

Aides said Obama will also repeat his call for Congress to pass a package of programmes for small business, which Republicans have blocked in the Senate.

Republican leaders are skeptical about Obama’s proposals, saying they are reluctant to back more spending because the US$814 billion stimulus Obama got through Congress in early 2009 has not had the desired effect.

Polls show deep public skepticism about the stimulus plan, and White House officials have proven reluctant to even use the word – saying repeatedly Obama’s new proposals are not another stimulus programme, but rather a set of proposals.

Economists said the new plans could provide a modest burst of activity in a slow-growth economy, but the risk is that they would only pull forward investments, which would do little to alter a sluggish growth trajectory and spur hiring to alleviate the 9.6 per cent unemployment rate.

The White House says the eventual cost of accelerating the US$200 billion in tax write-offs would be US$30 billion, because businesses would eventually deduct the depreciation of their equipment, bringing the total value of the different programmes to US$180 billion – or more – over time.

An administration official said the US$50 billion in infrastructure spending would be in the first year, with more possible, depending on discussions with Congress.

The discussion has taken on all the trappings of a heated political campaign.

White House spokesman Robert Gibbs openly acknowledged Cleveland was selected as the venue for Obama’s speech today because House Republican leader John Boehner of Ohio had made a speech there late last month calling on Obama to fire his economic team.

Aides said Obama’s speech will not include any additional proposals. There had been widespread speculation that he might announce measures including a payroll tax holiday or increased federal funding for clean energy programmes. – Reuters