plus 1, Obama Vows to Work With Republicans in 2011 to Create Jobs - BusinessWeek

Obama Vows to Work With Republicans in 2011 to Create Jobs - BusinessWeek

Posted: 01 Jan 2011 12:18 PM PST

January 02, 2011, 6:49 AM EST

By Kate Andersen Brower

Jan. 1 (Bloomberg) -- President Barack Obama pledged to work with Republican lawmakers to strengthen the economy in 2011 and build on economic gains that show the recovery is "gaining traction."

"In a few days, a new Congress will form -- with one house controlled by Democrats and one house controlled by Republicans, who now have a shared responsibility to move this country forward," the president said in his weekly address on the radio and the Internet.

Obama wished Americans a happy new year and said his "commitment" for 2011 is "to do everything I can to make sure our economy is growing, creating jobs, and strengthening our middle class."

Claims for jobless benefits dropped last week to the lowest level in two years, an indication that the U.S. labor market is taking a turn for the better. Other data showed that businesses expanded last month at the fastest pace in two decades and pending home sales climbed in November for the fourth time in five months.

Still, Obama must confront a stubborn 9.8 percent unemployment rate. In his address, he noted that "solving our challenges won't be quick or easy" as the nation emerges from a "once-in-a-lifetime recession that's taken a terrible toll on millions of families."

When the 112th Congress convenes Jan. 5, Republicans will take control of the U.S. House and will hold 47 of the Senate's 100 seats. In the Nov. 2 elections, Democrats lost 63 House seats, costing their party control of the chamber. In the Senate, the Democrats' majority was shaved by six seats; the Democratic caucus will have 53 votes this year.

Repeal Efforts

Obama faces a tough road ahead over the next two years as Republicans, led by incoming House Speaker John Boehner of Ohio, vow to undertake efforts to repeal his health-care overhaul, ease new financial regulations and cut government spending.

In his radio address the president said he's "willing to work with anyone of either party who's got a good idea and the commitment to see it through."

As 2011 starts, he said, it's important "to look ahead - not just to this year, but to the next 10 years, and the next 20 years" to find ways to stimulate the economy through innovation. He said it's critical that the U.S. discover ways to "out-compete other countries around the world."

"I'm confident that we are poised for a period of progress - one in which our economy is growing, our standing in the world is rising, and we do what it takes to make sure America remains in the 21st century what it was in the 20th: the greatest country in the world," he said.

Holidays in Hawaii

The first family is spending the holidays in Hawaii, where the president grew up. Obama planned to spend New Year's Eve with family and friends and take part in an annual talent show, according to White House spokesman Bill Burton.

In the Republican address, U.S. Senator-elect Kelly Ayotte of New Hampshire said that as members of her party prepare to take control of the House, they are making their own New Year's resolutions, which include limiting spending, cutting the deficit and guarding against terrorist threats.

"For Republicans, the start of the 112th Congress on Wednesday will mark the opening of a new chapter for our country and our party," she said.

"The American people sent us to Congress with clear instructions: make government smaller, not bigger," she said.

Taming the nation's $1.3 trillion federal budget deficit will be a leading agenda item in the 112th Congress as lawmakers face a vote early this year on raising the national debt ceiling. Obama's debt-reduction panel failed last month to get enough support for its recommendations to reduce the annual deficit to about $400 billion in 2015.

'An American Problem'

Deficit reduction "isn't a Republican problem or a Democrat problem -- it's an American problem that will require tough decision-making from both parties," Ayotte said. "Republicans are ready to lead that fight."

Job creation is a top priority on the Republican list of New Year's resolutions, she said. The extension of the 2001 and 2003 tax cuts over the next two years was an "important first step" to help jump-start the economy, she said.

Obama on Dec. 17 signed an $858 billion bill extending for two years the Bush-era tax cuts for all income levels. It also continues expanded jobless insurance benefits to the long-term unemployed for 13 months and reduces payroll taxes for workers by 2 percentage points during 2011.

--With assistance from Timothy R. Homan and Bob Willis in Washington. Editors: Leslie Hoffecker, Laurie Asseo.

To contact the reporter on this story: Kate Andersen Brower in Honolulu at kandersen7@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

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