By Caren Bohan
DETROIT (Reuters) - U.S. President Barack Obama on Monday previewed proposals for new infrastructure spending and an extension of payroll tax cuts as part of a major jobs package he will unveil this week, and challenged Republicans to find common ground with him.
Obama used a Labour Day rally with cheering union workers in economically hard-hit Detroit to set a combative tone ahead of his nationally televised speech to Congress Thursday, signalling he is ready to confront Republicans over their resistance to his agenda.
"We're going to see if congressional Republicans can put country before party," Obama told a campaign-style gathering of about 13,000 in a General Motors parking lot. "The time for Washington games is over. The time for action is now."
Obama's jobs speech has taken on new urgency after Friday's dismal Labour Department report, which showed zero U.S. employment growth in August and the jobless rate stuck at 9.1 percent.
The data stoked fresh fears that the fragile U.S. economy could slide back into recession and underscored for Obama that his 2012 re-election chances hinge heavily on his ability to reignite the recovery and spur job creation.
"On Thursday, we're going to lay out a new way forward on jobs to grow the economy and put more Americans back to work," Obama said in an appearance also aimed at re-energizing labour supporters who helped him win the 2008 presidential election.
A FEW SPECIFICS
The White House has taken care to guard most specifics of the plan Obama will lay out before a joint session of Congress.
But Obama told his audience the package would include infrastructure projects such as rebuilding roads and bridges across the country to put construction workers back on the job. Republicans who control the House of Representatives have resisted such ideas as wasteful spending.
"We've just got to get Congress onboard," Obama said. "Let's put America back to work."
Obama said he would push Congress to extend soon-to-expire payroll tax cuts to spur hiring and put more money in Americans' pockets.
A payroll tax holiday for workers and extended unemployment benefits were enacted in a bipartisan package in December. Obama called earlier this year for a continuation of both measures through next year.
But congressional Republicans have been lukewarm on the idea, with some saying the White House should focus on measures such as broad tax reform that would have a more lasting impact on the economy.
Obama also used his Detroit visit to try to rally support from the U.S. labour movement, which backed him heavily in the 2008 race but has shown signs of disappointment with some of his economic policies since he took office.
Richard Trumka, president of the 12 million-member AFL-CIO, the largest U.S. labour coalition, urged Obama last week to act with "boldness" with an ambitious jobs program and said unions would be judging his plan as they decide where to throw their support in the campaign.
Obama got an enthusiastic reception in Detroit -- the audience interrupted him with chants of "Four more years."
Obama touted the benefits of his administration's 2009 decision to bail out Detroit-based automakers General Motors and Chrysler. The Obama administration says its intervention helped save more than 1 million jobs within the auto sector and other industries it supports.
Despite that, the unemployment rate in Detroit was 14.1 percent in July 2011, the latest month for which statistics were available. It is the largest city in Michigan, which is expected to be crucial battleground state in the 2012 election.
(Writing by Caren Bohan and Matt Spetalnick; editing by Mohammad Zargham)
