CEDAR RAPIDS, Iowa (Reuters) - President Barack Obama began a campaign-style swing through political battleground states on Wednesday, pitching his State of the Union initiatives on taxes and jobs as he made his case for a second term.
Fresh from his election-year speech to Congress, Obama amplified his proposals for rewarding companies that keep jobs at home and eliminating tax breaks for those that outsource overseas. He also pressed his argument for higher taxes on the rich.
Obama used his last State of the Union speech before the November election to cast himself as a champion of the middle class, but with polls showing most Americans unhappy with his economic leadership he faces a tough re-election challenge.
Embarking on a three-day, five-state tour starting in Iowa, Obama defended his record and sought to turn up the heat on Republicans in Congress he has accused of obstructing his economic recovery efforts.
"There are people in Washington who seem to have collective amnesia. They seem to have forgotten how we got into this mess," Obama told workers at a conveyor belt factory in Iowa. "They want to go back to the very same policies ... that have stacked the deck against middle-class Americans for years."
Republicans have accused Obama of promoting the "politics of envy" and pursuing policies that kill jobs and hinder growth.
While the biggest proposals in Obama's speech are considered unlikely to gain traction in a deeply divided Congress, the White House believes he can tap into voters' resentment over Wall Street excesses and Washington's dysfunction.
He used his Iowa visit primarily to build on his State of the Union assault on tax breaks he says reward U.S. firms for shipping jobs overseas. He has also called for a minimum international tax on the overseas profits of American firms.
As he spoke, the White House rolled out more details, including new tax breaks for U.S. manufacturers and closing loopholes for companies' income overseas.
"We've got to stop rewarding businesses that ship jobs overseas," Obama said.
He planned to keep the focus on jobs at a stop in Arizona on Wednesday. A Nevada visit is likely to highlight proposed remedies for the housing crisis. He will also go to Colorado and Michigan. All are states crucial to his re-election chances.
In his Tuesday night address that afforded him one of his biggest political stages of the year, Obama set as a central campaign theme a populist call for greater economic fairness.
He mentioned taxes 34 times and jobs 32 times during his hourlong speech, emphasizing the two issues at the heart of this year's presidential campaign.
But Obama seemed to put no blame on himself for a fragile economic recovery and high unemployment that could trip up his re-election bid.
A highlight of Obama's speech was his call to set a 30 percent minimum tax on millionaires, known as the "Buffet rule" because it is favored by billionaire Warren Buffett.
Obama's message could resonate in the 2012 campaign following the release of tax records by Mitt Romney, a potential Republican rival and one of the wealthiest men ever to run for the White House. He pays a lower effective tax rate than many top wage-earners.
Democrats have hammered Republicans in Congress for supporting tax breaks that favor the wealthy. Republicans staunchly oppose tax hikes, even on the richest Americans, arguing they would hurt the economic recovery.
"No feature of the Obama presidency has been sadder than its constant efforts to divide us, to curry favor with some Americans by castigating others," Indiana Governor Mitch Daniels said in the Republican response to Obama.
In a critique of Obama's speech, Romney, campaigning in Florida for Tuesday's party primary, accused the Democratic president of being "detached from reality" in his appeals to voters who have suffered economic hardship under his tenure.
Obama's challenge is clear. The U.S. unemployment rate was 8.5 percent in December. No president in the modern era has won re-election with the rate that high.
As a result, Obama cast a wide net in his State of the Union speech.
Taking aim at China - an election-year target of Republicans and Democrats alike over its currency and trade practices - Obama proposed creation of a new trade enforcement unit.
Obama said he would ask his attorney general to establish a special financial crimes unit to prosecute those parties charged with breaking the law, and whose fraud contributed to the 2007-2009 financial crisis.
He also said he would send to Congress a proposal to allow more Americans to take out new and cheaper mortgages as long as they are current on their payments, savings that would amount to $3,000 per household each year. The depressed housing market continues to drag on the economy.
Additional reporting by Alister Bull and Steve Holland, writing by Matt Spetalnick; Editing by Doina Chiacu