Obama kicks off listening tour of businesses

President Barack Obama talks next to Chairman of the White House Council of Economic Advisers Austan Goolsbee (L) at Winning the Future Forum on Small Business at Cleveland State University in Ohio, February 22, 2011.

CLEVELAND (Reuters) - President Barack Obama, with much of his Cabinet in tow, visited the economically hard-hit Midwest on Tuesday as part of his effort to mend fences with U.S. entrepreneurs amid complaints from some small businesses that his policies inhibit growth.

"My administration is going to go to bat for America's businesses around the world. You should know that," Obama assured a small business forum at Cleveland State University.

Since his Democrats were trounced in the November congressional elections, Obama has sought to rebuild ties with U.S. business that became strained over companies' complaints about Obama's regulatory agenda and healthcare reform law.

The White House billed the trip as a chance to exchange ideas with the business community on how the administration can spur job creation and reduce stubbornly high unemployment, considered crucial to Obama's 2012 re-election chances.

"It is small businesses like yours that help drive America's economic growth and create two out of every three new jobs," he said.

Obama also used his visit to Ohio, a traditional swing state in presidential elections, to tout his agenda for investment in innovation and education coupled with his proposals for reining in long-term government deficits.

He faces a budget battle back in Washington against Republicans who say he must enact deeper spending cuts.

"I want to work with both Democrats and Republicans to make even bigger dents in our deficits," Obama said. "At the same time we can't sacrifice investments in our future."

CASE NAMED TO JOBS PANEL

Obama was accompanied not only by several Cabinet members, but also by AOL co-founder Steve Case, who he said had agreed to join his new jobs and competitiveness panel that holds its first meeting at the White House on Thursday.

Case has also been named to lead a White House initiative known as the "Startup America Partnership" aimed at promoting entrepreneurship. Obama praised Case as "somebody who grew a small business into a large business."

Obama was joined in his meetings with local business owners by Treasury Secretary Timothy Geithner, Energy Secretary Steven Chu and other Cabinet secretaries who hosted sessions on access to capital, entrepreneurship, clean energy, exports and workforce development.

Ohio suffered heavy job losses during the recession and could be critical to Obama's political fortunes in next year's presidential election.

The visit was Obama's first to the state since before the congressional elections last November in which Republicans took power in the U.S. House of Representatives and boosted their numbers in the Senate.

The Democratic president won Ohio in 2008 when he ran against Republican John McCain but its voters are closely divided between Democrats and Republicans.

The U.S. unemployment rate was 9 percent in January. In Ohio, it was 9.6 percent in December, the latest month for which statistics were available.

(Editing by Eric Walsh)