US President Mr Barack Obama said that he will propose a plan in September to jump start the US economy as he struggles to convince skeptical voters that he has something new to offer.

Mr Obama, with his approval ratings falling, is set to propose short term measures to boost hiring and call on a congressional panel to deliver more than the USD 1.5 trillion in savings by November 23rd 2011, partly through increased tax revenue.

Mr Obama said that "When Congress gets back in September, my basic argument to them is this, we should not have to choose between getting our fiscal house in order and jobs and growth. We can't afford to do just one or the other, we've got to do both."

Mr Obama said another recession was unlikely but expressed concern about the slow pace of growth. He added that "I don't think we're in danger of another recession, but we are in danger of not having a recovery that is fast enough to deal with a genuine unemployment crisis for a whole lot of folks out there. And that's why we need to be doing more."

Mr Obama's insistence that higher taxes be a part of any long-term effort to improve America's fiscal health and his push to spend more now to bolster the labor market could mean his proposals go nowhere.

Still, Republicans, intent on making Mr Obama a one term president, repeated opposition on Wednesday to new taxes and criticized the suggestion of new economic stimulus spending.

Mr Mitch McConnell Senate Republican Leader said that "Quit borrowing. Quit spending. Quit trying to raise taxes."

House Speaker Mr John Boehner, the top Republican in Congress, said that the president needed to do more than fluff up tired ideas in his speech without a clear plan of how to help the economy. He added that "To get our economy moving, what the American people need from the president is leadership and serious solutions that reflect a true change in his approach to our economy and the role of government."

Any failure of Mr Obama's plan could play into his hands politically as he tries to convince voters that Republican refusal to compromise is to blame for America's fiscal and economic mess. Mr Obama's Democrats control the Senate and Republicans control the House of Representatives.

Mr Obama faces serious doubts about his economic leadership in the wake of the first US credit rating downgrade and with unemployment stuck above 9%, a major impediment to his re election prospects next year.

He has been criticized in recent weeks by political opponents, allies on the left and Wall Street. Republicans say he has no plan to reduce unemployment while some Democrats say he has not been aggressive enough in promoting the need for stimulus spending to keep the economy moving.

(Sourced from www.reuters.com)