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President urges 'fair shot for everyone'

WASHINGTON — President Barack Obama warned the nation Tuesday that the decades-old promise of a secure and rising middle class is under threat because of growing disparities between the rich and everyone else in America.

In an election-year State of the Union message that will likely serve as the template for the months of campaigning ahead, Obama outlined a series of steps that he believes will reinforce the tentative economic recovery, including proposals to eliminate tax incentives for companies to move jobs overseas, to make college more affordable and to expand help for creditworthy homeowners looking to refinance mortgages at historically low interest rates.

None of the proposals constitutes a single bold stroke to revive the economy, but the heart of Obama's message — one he has underscored in appearances around the country in recent months — was that America's wealthiest citizens must do more to cement the economic recovery.

The approach was typified by his call for those who make more than $1 million a year to pay a tax rate of at least 30 percent and to forgo a host of deductions he said they do not need.

In detailing what he called a "blueprint for an economy built to last," Obama struck the populist chords that his Republican presidential rivals have criticized as "class warfare."

"We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by," Obama told a boisterous House chamber and a prime-time television audience, "or we can restore an economy where everyone gets a fair shot, everyone does their fair share and everyone plays by the same set of rules.

"What's at stake are not Democratic values or Republican values, but American values," he said. "We have to reclaim them."

His advisers are well aware that his pursuit of a second term is imperiled by a still-staggering economy and a perception, even among those in his own party, that he has not effectively challenged Republicans to pass his economic plans.

Nearly all of the roughly hour-long speech Tuesday was devoted to the economy. Obama spent only a brief time on foreign policy.

He underscored that in the past year he has overseen the killing of Osama bin Laden and the end of the Iraq war, an unpopular conflict that he had pledged to end as a candidate. Adm. William McRaven, who oversaw the May raid that killed bin Laden, was invited to sit with first lady Michelle Obama for the address.

In his speech, Obama proposed using half of the "peace dividend" as he ends America's wars in Afghanistan and Iraq, about $200 billion over the next six years, to pay for the construction of new roads, bridges, rail lines and other infrastructure that he said is critical to the country's ability to compete in a global economy.

In a tacit response to criticism from his Republican rivals, he also announced that he would create a "trade enforcement unit" that will allow the government to more aggressively pursue unfair trade practices in countries around the world.

He specifically mentioned China, long accused of keeping its currency unfairly low against the dollar to boost exports and make U.S. imports more expensive. Republican presidential candidate Mitt Romney has criticized Obama for failing to challenge China over its trade practices.

As he has in the past, the president spoke optimistically about the trajectory of the economy, which, he has repeatedly reminded Americans, was in the depths of a recession when he took office and is now adding jobs. The unemployment rate still stands at 8.5 percent, dangerously high for an incumbent seeking a second term.

But his focus Tuesday was on economic unfairness, a theme he has emphasized in recent weeks, most notably in a speech last month in Osawatomie, Kan.

There he declared the trickle-down economics of his Republican predecessors a failure that the country should not return to in November, and Tuesday he echoed that message.

"As long as I'm president, I will work with anyone in this chamber to build on this momentum," Obama said. "But I intend to fight obstruction with action, and I will oppose any effort to return to the very same policies that brought on this economic crisis in the first place."

Many of the proposals Obama outlined Tuesday were ones he has raised before, including some left over from last year's State of the Union address.

But all of them appeared tailored to appeal to middle-class interests and anxieties, especially those concerning the direction of the economy and where the next generation of jobs will come from.

He called on Congress to help homeowners who are current on their payments but unable, for whatever reason, to refinance at lower mortgage rates.

"Think about the America within our reach: a country that leads the world in educating its people," he said. "An America that attracts a new generation of high-tech manufacturing and high-paying jobs. . . .

"The defining issue of our time is how to keep that promise alive. No challenge is more urgent. No debate is more important."