Obama to angry Americans: I hear you

President Barack Obama delivers his first State of the Union address on Capitol Hill in Washington, January 27, 2010.

WASHINGTON (Reuters) - President Barack Obama had a message for Americans frustrated at high unemployment and skeptical of his handling of the U.S. economy: I hear you.

Facing strong pressure to change the course of his presidency after a year devoted to a now-stalled healthcare overhaul, Obama had no choice but to make a tactical shift.

"Jobs must be our number one focus in 2010," Obama declared in his first State of the Union speech.

The president entered the chamber of the House of Representatives in the biggest trouble since he took power a year ago.

His vision of hope and change has given way to voter anger over a stuttering, jobless recovery, bank bailouts and government spending, and polls show that Americans consider the country on the wrong track.

Looking to restore Americans' confidence in him, Obama adopted an apologetic tone in acknowledging political setbacks and admitting he did not properly explain the complicated healthcare legislation.

But, in line with a populist approach he has taken lately, he made no apologies about pursuing an overhaul of the U.S. health system that he said is needed now more than ever and vowed "we will not quit" trying to help the middle class.

And he spread the blame around, saying an ugly partisan tone infects Washington, fed by both parties and urged on by a willing news media.

He once again pointed fingers at his predecessor Republican George W. Bush for the economic mess he inherited, without mentioning him by name. That drew fire from critics who believe Obama has contributed to the problems by driving up the budget deficit with a $787 billion stimulus.

"I think it was unfortunate," Republican Senator John McCain told Reuters in response. "He said, 'I'm not here to look back' then on several occasions blamed it on Bush. I was disappointed."

Just two weeks ago Obama was on the verge of a major victory on healthcare and had planned to celebrate passage of the legislation in his speech.

But Republican Scott Brown's win of a U.S. Senate seat in traditionally liberal Massachusetts changed all that. Democrats suddenly looked like a party under siege and vulnerable in November congressional elections.

NOT BACKING DOWN

Obama did not back down from his ambitious domestic agenda, but took pains to make it secondary to jobs.

"People are hurting," he said, and he emphasized the need for a multi-billion-dollar jobs bill along with $30 billion in small business tax incentives and a three-year spending freeze on domestic spending.

Will independent voters who helped elect Republican governors in Virginia and New Jersey last November and Brown last week give Obama a second chance?

Economist William Galston of the Brookings Institution said they might, citing Obama's emphasis on spending restraint and deficit reduction.

"I think independents will continue to have doubts about the course of the administration but I think at least some of them will be at least be willing to give him a second chance," he said.

Obama urged members of the Congress to take another crack at healthcare reform "as temperatures cool" and told fellow Democrats they still hold a strong majority in Congress and should "not run for the hills."

But he offered no proposals on how to break a partisan deadlock on the issue, whether to fight on for an expansive overhaul or focus on a scaled-back plan.

"There were a lot of mixed messages in that very long speech," said Larry Sabato, a political science professor at the University of Virginia.

Obama also ceded ground on climate change, another item at the top of his 2009 list. He acknowledged it will be difficult to pass in an election year and called for energy efficiency measures.

But he did not mention the item at the heart of the debate, the cap-and-trade market on emissions blamed for warming the planet and considered by Republicans a likely route to higher taxes and energy bills.

(Editing by Chris Wilson)