Obama tries to sell jobs plan, end gridlock (Reuters)

RICHMOND, Virginia (Reuters) – President Barack Obama began an uphill battle on Friday for support for a $447 billion jobs plan he hopes will rescue a faltering economy and his own re-election prospects.

A day after unveiling his proposals for tax cuts and public works spending on Capitol Hill, he pitched the plan directly to Americans with a speech in Virginia, kicking off a months-long campaign to promote it across the country.

"Everything in it will put more people back to work and more money in the pockets of those who are working. Everything in it will be paid for," he told nearly 9,000 supporters at University of Richmond at an event dotted with "2012" signs.

"Next week, I will send it to Congress. They should pass it right away," he said, calling on people to email, tweet, fax, visit, Facebook and even "send a carrier pigeon" to make sure their elected officials get the message they need to act.

"I want you tell your congressperson the time for gridlock and games is over," Obama said.

In Detroit, the automotive capital of the United States where Obama previewed his speech on Monday, there was marked impatience among long-term unemployed workers.

"If he can make it happen, it needs to happen today," said 53-year-old internet technician Ed Render who was laid off from Ford Motor Co two years ago. "I get my last unemployment check this week. I'm freaking out."

The national unemployment rate in July was 9.1 percent. Detroit's rate during the same period was 24.4 percent.

The White House will send the jobs bill to Congress next week but it may take months for lawmakers to work through it.

The Democratic president has promised the plan will be paid for but not yet revealed how. This is a key issue for Republicans intent on reducing the U.S. budget deficit.

A bitter fight between Republicans and Democrats over how to cut that deficit brought the United States to the edge of default in early August. It ended in a rushed agreement for them to find $1.2 trillion or more in savings by November 23.

Standard & Poor's downgraded the U.S. credit rating over the gridlock. Credit rating agencies want the bipartisan "super committee" tasked with finding those savings to also offset the cost of the jobs bill.

Obama said he would outline proposals for what could amount to $2 trillion in cuts over 10 years on September 19.

Those are expected to include tweaks to the Medicare and Medicaid health programs for the elderly and poor, as well as to Social Security retirement benefits, plus some spending cuts and tax changes for corporations and wealthy Americans.

The White House sees Obama's jobs plan -- a mix of payroll tax cuts and spending to upgrade roads, bridges and schools -- as the best hope for reducing the unemployment rate that poses the biggest threat to his re-election hopes.

Early estimates suggested it could lift U.S. growth by 1 to 3 percentage points in 2012, lower the unemployment rate by at least half a percentage point and add well over 1 million jobs. Mark Zandi, chief economist at Moody's Analytics, said it could create 1.9 million jobs.

With his on-the-road messaging, Obama hopes to rally enough support to pressure Republicans to get behind the plan so that it can start to lower unemployment before voters make up their mind about who to support in November 2012.

TAX CUTS YES, INFRASTRUCTURE NO

There were initial signs that Republican congressional leaders may be ready to find some common ground on the plan, despite their opposition to much of Obama's agenda over the past year.

Republican House of Representatives Speaker John Boehner said Obama's ideas merit consideration. Eric Cantor, the second-ranking Republican in the House, said the payroll tax cuts were "something that will be a part of the discussions."

"I heard plenty in the president's speech last night where there is a lot of room for commonality and we can get something done quickly," Cantor told CNN on Friday.

But he warned it was misleading to say the jobs package would be fully paid for. He said Republicans were unconvinced about an infrastructure bank, another component of Obama's jobs plan, but could accept other aspects, including tax cuts.

In a letter to Obama, Republicans urged him to spell out his ideas in a detailed form when he sends them to Capitol Hill so that their cost impact can be measured.

Democrats hope Republicans will be willing to accept the public works programs and funds to hire teachers that round out Obama's program, along with mortgage refinancing help.

Vice President Joe Biden said on Friday that once it is passed, the jobs plan would filter money into the economy in three to six months. That means it could make a dent by summer 2012 so long as it is passed this year.

Bleak jobs figures and other data have raised fears the U.S. economy could slide into another recession.

While the economy's woes have sent Obama's popularity tumbling to new lows, Republicans are well aware they could suffer political fallout too if Obama succeeds in painting them as obstructionists in the effort to fix the jobs problem.

Financial markets reacted coolly to Obama's plan, fretting that it may not win enough Republican support. But worries about the resignation of a European Central Bank executive board member soon eclipsed that skepticism, causing U.S. stock indexes to tumble more than 2 percent on Friday.

(Additional reporting by Laura MacInnis and Caren Bohan in Washington and John D. Stoll and Bernie Woodall in Detroit; editing by Ross Colvin and Mohammad Zargham)

Posted in: business,news