Why Obama had to say he's no socialist

WASHINGTON (Reuters) - President Barack Obama sought to win back moderate voters skeptical of his economic stimulus and healthcare plans by insisting in front of business leaders on Wednesday that he is no socialist.

Here's why he took the approach he did:

* Republicans have cast his plans to overhaul the healthcare system and limit carbon emissions as excessive government intrusion. They assail his $787 billion stimulus package as an example of big-spending policies. Polls suggest such criticism resonates with politically independent voters in a country where individual freedoms are fiercely guarded.

* The Tea Party movement, a populist conservative group, has rallied opposition to Democrats by emphasizing what it views as a heavy-handed, government-oriented approach by the Obama administration.

* Wariness among some in the business community could cost Obama and fellow Democrats crucial support. The party is worried about potential losses in November elections that will decide the make-up of a Congress where Democrats now hold a healthy majority. Media reports have highlighted a shift by Wall Street in campaign contributions toward Republicans.

* After having taken a populist approach to what he called Wall Street's executive "fat cats" and taken issue with their "obscene" compensation levels, Obama insisted he does not begrudge rewards for a job well done and it was not his goal to punish Wall Street -- an approach which could hurt him with voters infuriated by bankers' bonuses.

* After paying little attention to the issue of trade in his first year in office, Obama has begun to signal a renewed interest. In the speech, he said he wanted to work on resolving obstacles to congressional approval of trade pacts with South Korea, Panama and Colombia. He said he wanted to conclude a Doha agreement but would insist that competitors played fair.

* In a bid to appear even-handed, Obama said that while financial regulatory reforms were needed to avoid future crises, he was aware of the need to avoid stifling lending. More vigorous support of trade would help his standing with the business community but labor unions, a key Democratic constituency, are cautious about the trade agenda. He also promised to work with companies that would face "transition costs" in a cap-and-trade system.

* Obama gave a nod to Republicans and to moderates in his Democratic Party who have become increasingly anxious about budget deficits. He emphasized his commitment to rein in the "massive deficit," highlighting his proposals to freeze some spending programs and the naming of a "fiscal commission" to recommend ways to reduce the debt.

(Writing by Caren Bohan; Editing by Howard Goller)