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Obama calls on US to restore global competitiveness (1st Lead)

Jan 26, 2011, 3:26 GMT

US President Barack Obama (R) and first lady Michelle Obama (L). EPA/Mark Wilson / POOL

Washington - President Barack Obama on Tuesday said it was critical for the United States to regain its global competitiveness in order revive the world's largest economy.

In a wide-ranging annual State of the Union address to Congress, Obama called for a five-year freeze in domestic spending and new investments in education, research and infrastructure.

Obama set an ambitious goal of deriving 80 per cent of the country's electricity from clean energy sources by 2035. He called for an end to government subsidies for oil companies and pledged to put 1 million electric vehicles on the road by 2015.

'At stake is whether new jobs and industries take root in this country or somewhere else,' Obama said, warning that the United States had fallen behind other countries in education levels, clean energy and major infrastructure projects such as high-speed rail and internet access.

Stronger competition from emerging powers like China and India was forcing a 'painful' transition in the US economy, Obama said: 'The world has changed. The competition for jobs is real. But this shouldn't discourage us. It should challenge us.'

Speaking in the wake of this month's shooting of a congresswoman in Arizona, Obama said the true test of whether the country's politicians had learned the lessons of that violent act would lie in whether they could improve their cooperation in the coming year.

Obama's appeal came as lawmakers from both political parties sat next to each other, instead of on opposite sides of the chamber, in homage to the wounding of Gabrielle Giffords and killing of six bystanders in Tucson, Arizona.

'What comes of this moment will not be determined by whether we can sit together tonight, but whether we can work together tomorrow,' Obama said.

With the call for new investments in education, infrastructure and research, Obama sought to draw a line against conservative lawmakers who have called for dramatic cuts in all areas of government spending amid a skyrocketing national debt.

Obama insisted that any new spending measures would be paid for with cuts elsewhere. The new spending was key to continue the country's recovery from a damaging recession in 2008-09.

'We need to out-innovate, out-educate and out-build the rest of the world,' Obama said.

His freeze on annual domestic spending built on a proposal he made last year to hold the line on spending for the coming three years. The pledge to extend it to five years would save 400 billion dollars in the next decade and require 'painful cuts' in government programmes.

But Obama noted that domestic spending accounted for only 12 per cent of the government's budget. He called for more efforts to cut government health-care programmes for seniors and the poor, as well as putting state pension benefits on 'solid ground.'

'Now that the worst of the recession is over, we have to confront the fact that our government spends more than it takes in,' Obama said. 'That is not sustainable.'

Obama's annual address was largely devoted to domestic politics, the economy and job creation.

But on the foreign policy front, Obama said more sacrifices will be needed in Afghanistan while reiterating his commitment to begin withdrawing American forces this year.

'There will be tough fighting ahead, and the Afghan government will need to deliver better governance,' Obama said. 'But we are strengthening the capacity of the Afghan people and building an enduring partnership with them.'

Obama touted progress in Iraq as the US role winds down, and praised the completion of a new nuclear-arms reduction agreement with Russia that requires both sides to reduce their arsenals of strategic warheads by one-third from current levels. He vowed to keep pressure on Iran and North Korea to curtail their nuclear ambitions.

He offered his support Tuesday for the democratic movement in Tunisia that earlier this month toppled Zine al-Abidine Ben Ali, the president who fled into exile after a 23-year rule.

'We saw that same desire to be free in Tunisia, where the will of the people proved more powerful than the writ of a dictator,' Obama said. 'And tonight, let us be clear: the United States of America stands with the people of Tunisia, and supports the democratic aspirations of all people.'

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