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Obama, in campaign mode, defends policies and offers new proposal for transportation spending

By Peter Slevin
Monday, September 6, 2010; 10:21 PM

MILWAUKEE - Faced with the twin challenges of boosting the economy and saving Democratic congressional seats in November, President Obama tried to do a little of both on Monday at a Labor Day rally that heralded a prominent role for him in a fiery fall campaign.

Obama defended his record and criticized Republicans and his Washington foes as opponents of the middle class "who talk about me like a dog." He told several thousand cheering labor union members that the Republican Party is peddling failed economic policies, and he vowed to "make this case across the country between now and November."

"Their slogan," he said of Republicans, "is 'No, we can't. No, no, no. No.' "

The crowd answered by chanting Obama's signature 2008 slogan, "Yes, we can."

Under pressure to show that he is doing all he can to deliver jobs, Obama announced a proposal to spend $50 billion in the next year on roads, railroads and airport runways. The modernization plan, a more formal version of a long-standing pledge to improve the nation's crumbling infrastructure, is one of several economic proposals he is to make this week.

"So many Americans have been idled for months, even years, at a time when there is so much of America that needs rebuilding," Obama said. "We used to have the best infrastructure in the world. We can have it again."

White House officials said the $50 billion in new government spending would be the first installment of a six-year transportation strategy that would include investments in high-speed rail and air traffic control. To pay for it, the administration would raise taxes on oil and gas companies.

In addition to his infrastructure plan, Obama will lay out on Wednesday two new tax breaks for business: a permanent extension of the research tax credit worth $100 billion over 10 years, and a plan to let companies write off 100 percent of their new investment in plant and equipment this year and next.

The latter proposal would cost the Treasury about $30 billion over the next decade, but it would provide a much bigger boost to business in the short term, an administration official said Monday night, by encouraging companies to invest now, tax-free. White House economists say the plan would cut business taxes by nearly $200 billion over the next two years, though much of the money would be recouped thereafter.

If approved by Congress, the infrastructure money would be used to build or repair 150,000 miles of road, 4,000 miles of railroad track and 150 miles of runways, the officials said. The proposal includes creating an "infrastructure bank" to prioritize projects and attract private funds.

The officials declined to estimate how many jobs would be created at a time when the economic recovery is proving more sluggish than the administration hoped or predicted.

"Just more of the same," the Republican National Committee said in an e-mail to reporters, shortly before Obama spoke to the Milwaukee Area Labor Council's annual Laborfest.

"I hope his changes are to finally promote some private-sector growth, not just the growth in government or throwing billions of more dollars at every perceived problem," Wisconsin GOP Chairman Reince Priebus said.

Some elected Democrats, seeing their prospects dim because of an unemployment rate near 10 percent, have been pushing for a second stimulus bill to juice the economy. Eight weeks before midterm elections, in which they anticipate big gains, Republicans are campaigning heavily on the argument that Obama is mortgaging the country's future.

In jetting into Milwaukee from Washington for two hours, Obama returned to the event in which he kicked off his 2008 general election campaign. He arrived in full campaign mode, delivering a spirited speech that devoted far more time to winning votes than to detailing economic remedies.

Obama defended a string of policies, from the Democratic health-care overhaul and Wall Street regulation to the remaking of the college student-loan business. "We've given tax cuts, but we've given them to folks who need them," he said.

He declared to cheers that no part of Social Security will be privatized while he is president, and he entertained the crowd by lambasting Republicans. He said that "powerful interests" have not been happy with him.

"When it comes to just about everything we've done to strengthen the middle class and rebuild our economy, almost every Republican in Congress says 'No,' " Obama said. "If I said the sky is blue, they'd say no. If I said fish live in the sea, they'd say no. They just think it's better to score political points during an election than solve problems."

He added, "We've tried what they're peddling."

During his long slide in popularity since the early days of his presidency, Obama has struggled to show voters that he understands the economic calamity for unemployed workers and that he is doing what he can. He told the audience that he knows "there's still a lot of hurt out there."

Obama intends to speak in more detail about the economy on Wednesday in Cleveland, where House Minority Leader John A. Boehner (R-Ohio) urged him last month to fire his economic team and start over.

When it comes to the midterm elections, neither his audience nor the Democrats who preceded him at the microphone on Monday were under any illusions. Obama is not on the ballot, but the future of his agenda could be riding on the Nov. 2 results.

"We were great in '08," one speaker warned the audience. "But if you've got this president's back, you'd better be back in 2010."

slevinp@washpost.com

Staff writer Lori Montgomery contributed to this report.

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