Obama to focus on middle class in State of Union address

WASHINGTON - US President Barack Obama will challenge the Republican-led Congress with tax-raising ideas for helping middle-class Americans in a State of the Union speech on Tuesday that will set up a tough debate and may impact the 2016 campaign to replace him.

Obama will push a plan in his speech to increase middle class benefits by hiking taxes by $320 billion over 10 years for the wealthy and financial firms.

Obama and Republicans had signaled after the November midterm election that they saw tax reform as a potential area for compromise. But Republicans who control of both houses of Congress are in no mood to raise taxes on anyone and were quick to pan Obama's proposal.

"This plan that we'll hear about tonight appears to be more about redistribution, with added complexity, and class warfare, directed at job-creating small businesses, than about tax reform," said Republican Senator Orrin Hatch, the Senate's top tax law writer, in a speech to the U.S. Chamber of Commerce.

Obama's aim is to help those left behind by an economic revival taking hold six years into his tenure, which began with the Democrat facing a crippling financial crisis.

Looking to burnish his legacy with two years left in office, Obama will appear before a joint session of Congress at 9 p.m. (0200 GMT Wednesday). The speech will be his best opportunity of the year to command the attention of millions of Americans watching on television.

"Now that we have fought our way through the crisis, how do we make sure that everybody in this country, how do we make sure that they are sharing in this growing economy?" Obama said in a YouTube video preview of his speech, part of an elaborate White House social media strategy to amplify the themes of the speech.

Recent polling shows Obama's popularity ratings have rebounded off their lows. An NBC News/Wall Street Journal poll conducted last week found 49 percent of Americans approve of Obama's handling of the economy, the highest since his first year in office.

White House officials are betting that Republicans, also under pressure to help the middle class and needing to prove they can govern, will be willing to compromise on some aspects of the plan.

"If the Republicans have other ideas to focus on the middle class, let's do that. So far, we haven't heard that, but we welcome that debate," said Denis McDonough, Obama's chief of staff, on NBC's "Today" on Tuesday.

The proposals are also likely to be the subject of a debate among potential candidates to replace him in 2016, a campaign that is just now getting started.

Obama will take his proposals on the road the next day, traveling to Idaho and Kansas to promote them.

He has already spent the past two weeks rolling out themes he plans to highlight, like the need to beef up cybersecurity and invest in infrastructure.

The speech will also allow Obama to update Americans on the struggle against Islamic extremists, two weeks after 17 people were killed in Paris attacks.

He will defend his decision to seek to normalize diplomatic relations with Cuba. Alan Gross, the U.S. aid worker whose release from a Cuban prison helped pave the way toward restoring diplomatic ties with Cuba, will be among first lady Michelle Obama's guests for the speech.