* State of the Union speech to focus on economy
* Wants not bigger government, but "smarter government"
* Let free enterprise work, Republican Rubio urges
* Obama to announce 34,000 troops to return from Afghanistan
By Steve Holland
WASHINGTON, Feb 12 President Barack Obama will
challenge a divided Congress on Tuesday to back his proposals to
create jobs for the middle class and produce a smarter, not
bigger, government in a State of the Union speech that will lay
out his second-term agenda.
"A growing economy that creates good, middle-class jobs -
that must be the North Star that guides our efforts," Obama will
Obama will enter the well of the House of Representatives
for a 9 p.m. EST (0200 GMT on Wednesday) address to a joint
session of Congress at a time when he is again locked in a
bitter battle with Republicans over taxes and spending, and this
tussle will cast a heavy shadow over his appearance.
Seeking to use momentum from his re-election victory, the
Democratic president will urge Congress to adopt his proposals
to increase taxes on the wealthy, overhaul U.S. immigration laws
and enact tighter gun controls.
Obama's speech marks a renewed focus on the U.S. economy as
he tries to satisfy American worries about a stubbornly high
unemployment rate of 7.9 percent.
The White House has signaled Obama will urge U.S. investment
in infrastructure, manufacturing, clean energy and education,
despite Republican opposition to increased government spending
and a political divide over how to tame the budget deficit.
According to speech excerpts released by the White House,
Obama will speak up for the middle class.
"It is our unfinished task to make sure that this government
works on behalf of the many, and not just the few; that it
encourages free enterprise, rewards individual initiative, and
opens the doors of opportunity to every child across this great
nation of ours," he will say.
Obama will fight back against Republicans who say he simply
wants to close tax loopholes enjoyed mostly by the wealthy in
order to produce more revenue for government spending, instead
of paying down the staggering national debt of $16 trillion.
He will say his additional proposals are fully paid for and
consistent with a budget framework both parties agreed to 18
"Let me repeat - nothing I'm proposing tonight should
increase our deficit by a single dime. It's not a bigger
government we need, but a smarter government that sets
priorities and invests in broad-based growth," he will say.
Florida Senator Marco Rubio, a rising Republican star who
will deliver his party's response to Obama's speech, will say
that tax increases will not produce needed jobs nor reduce the
deficit, and that government spending needs to be reined in.
Rubio is to make an impassioned plea to let the free
enterprise system work.
"Economic growth is the best way to help the middle
class. Unfortunately, our economy actually shrank during the
last three months of 2012. But if we can get the economy to grow
at just 4 percent a year, it would create millions of middle
class jobs," Rubio will say, according to speech excerpts.
Just three months after winning re-election on Nov. 6, Obama
has a narrow window to push through policy priorities on the
economy, immigration and gun control.
Analysts say he has roughly a year before Washington turns
its attention to the 2014 mid-term elections, which could sweep
more Republicans into Congress and accelerate the subsequent
"lame duck" status that defines presidents who are not running
for office again.
"He basically has a year for major legislative
accomplishments because after the first year you get into the
mid-term elections, which will partially be a referendum on his
presidency," said Michele Swers, an associate professor of
American government at Georgetown University in Washington.
On foreign policy, Obama will outline steps to unwind U.S.
involvement in the unpopular Afghanistan war and plans to
announce that 34,000 U.S. troops will return by early 2014, a
senior administration official said.
The State of the Union comes less than 24 hours after North
Korea conducted a nuclear test that Obama in a statement called
a "provocative act." Obama is expected to address Pyongyang's
latest action in his speech.