LEAD: Obama to call for "fair" economy in State of Union address

By Anne K Walters Jan 25, 2012, 0:43 GMT

Washington - US President Barack Obama is to focus Tuesday in his last State of the Union address before he faces reelection on the importance of an economy that provides opportunity for all Americans to get ahead and where everyone contributes their fair share.

'We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by,' Obama said in excerpts released by the White House ahead of the speech.

'Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules. What's at stake are not Democratic values or Republican values, but American values. We have to reclaim them.'

Against the backdrop of looming presidential and legislative elections, Obama will give his third State of the Union address at 9 pm Tuesday (0200 GMT Wednesday) at the US Capitol to a chamber packed with lawmakers and invited guests.

He is to lay out an economic 'blueprint' focussing on US manufacturing, energy, skills for American workers, and a renewal of American values. He is expected to call on wealthy Americans to contribute more and for an expansion of policies to advance middle-class interests.

'Let's never forget: Millions of Americans who work hard and play by the rules every day deserve a government and a financial system that do the same,' Obama is to say. 'It's time to apply the same rules from top to bottom: No bailouts, no handouts, and no copouts. An America built to last insists on responsibility from everybody.'

To illustrate his policies, Warren Buffett's secretary will sit alongside Michelle Obama.

Debbie Bosanek, Buffett's long-time assistant at Berkshire Hathaway, has been held up by the billionaire businessman as an example of unfair tax policies that the billionaire investor says have his secretary paying taxes at a higher percentage rate than he does.

Along with other invited guests who symbolize key elements of Obama's speech, she will share the first lady's box.

Obama has in the past called for tax reforms that would have millionaires contributing a greater share in taxes. Currently, many wealthy Americans pay a lower effective tax rate because much of their income comes from investments, which are taxed at a lower rate than the highest 35-per-cent rate for income.

But Obama has a tough task ahead as he works to convince a sceptical American public to again put its trust in his economic policies and win over a Republican-dominated Congress that has been intent on halting his efforts over the last year.

Republican Speaker of the House of Representatives John Boehner already dismissed the president's remarks before he had even taken the podium.

'It sounds like we're going to see a rerun of what we've heard over the last three years: more spending, higher taxes and more regulations,' he told reporters.

In the Republican response to the address, Indiana Governor Mitch Daniels is to call for a simplification of the tax code and lower tax rates, according to excerpts of his speech released before its delivery.

'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,' Daniels said. 'As in previous moments of national danger, we Americans are all in the same boat. If we drift, quarreling and paralyzed, over a Niagara of debt, we will all suffer, regardless of income, race, gender, or other category.'

Amid an 8.5-per-cent unemployment rate, the most recent job approval ratings for Obama released by pollster Gallup show 46 per cent of Americans disapprove of his performance, placing him among the lowest such ratings for US presidents in the third year of their presidencies.

And Obama faces a tough reelection battle in November against an as yet-undecided Republican challenger as the opposition attempts to paint his economic policies as a failure.