Obama to challenge foes on economy

US PRESIDENT Barack Obama yesterday threw down the gauntlet to Republicans on the economy, as the lagging recovery and crippling unemployment threaten Democrats with a mid-term election meltdown.

Obama was travelling to Cleveland, Ohio, in a personal challenge to Republican House of Representatives leader John Boehner, who used a recent visit to the city to demand the president sack his top economic aides.

In what USA Today newspaper bills as the "battle of Cleveland," Obama was highlighting a multi-billion-dollar package of tax breaks for businesses and spending on transport infrastructure meant to spur jobs growth and woo voters.

His plan, which faces an uncertain fate in Congress with lawmakers fixated on their own political skins ahead of the November 2 polls, appears to be a bid by Obama strategists to ease their boss's political weakness on the economy.

"We are in a very political period, people are going to be making choices," said a senior Obama administration official on condition of anonymity. "It is propitious we will be in Cleveland, where Mr Boehner was a couple of weeks ago, unveiling what he said was the Republican economic vision."

Boehner, a conservative Ohio Republican with a colorful turn of phrase, is eyeing the speaker's chair with his party tipped to grab control of the House from Democrats.

On August 24, in the city hugging the southern shore of Lake Erie, Boehner slammed Obama for "job killing tax hikes" and claimed the president had left America broke — though Boehner offered few detailed policies of his own.

Obama will accuse Republicans of pining for policies that caused the crisis, argue his actions prevented an even deeper disaster, and promote new initiatives costing around US$180 billion.

He will highlight a new plan to allow companies to fully deduct the cost of investments in equipment for their business from their tax bill. The largest-ever temporary investment incentive in US history would accelerate 200 billion dollars in tax cuts over the next two years — most of which would eventually be paid back to the government.AFP