Obama will use State of the Union address to rally America on election pledges

Buoyed by new stirrings in the economy and by the inability of the Republicans to coalesce around a candidate to challenge him in November, Barack Obama was preparing last night to set out his stall for re-election by pledging a level economic playing field for all Americans.

In the annual State of the Union address before a joint session of Congress, the President was to make the case for a second term, offering new initiatives on making taxes more fair, tackling the housing slump more aggressively and spurring job creation.

In newly populist tones, the President was expected to adopt an overarching theme painting the Republicans as the protectors of the rich and himself as the champion of the struggling middle class. It is a key moment to present a "blueprint" for recovery going into the re-election campaign. The State of the Union last year was seen by 42 million Americans. "We can go in two directions," Mr Obama said in a video preview sent to supporters. "One is towards less opportunity and less fairness. Or we can fight for where I think we need to go: building an economy that works for everyone, not just a wealthy few."

This morning, the President leaves Washington for a five-state tour to sell the main planks of his speech to voters. Central to his strategy will be to castigate Congress, which is deeply unpopular according to recent polls, and the Republican majority in the lower chamber in particular for standing in the way of his agenda. His so-called blueprint, much of which will meet resistance in Congress, was to include changes to the tax code and in particular an end to tax cuts for the rich introduced by George Bush. Mr Obama is also looking at tax incentives for US manufacturers to bring back jobs they have shipped overseas.

On the tax issue, Democrats believe they can hold up the case of Mitt Romney, who they still believe is likely to emerge as the Republican candidate this autumn, as Exhibit A as to why tax reform is necessary.

Tax filings released by the Romney camp yesterday showed the former Governor of Massachusetts had paid taxes at a rate of only 13.9 per cent in 2010. Mr Obama is also hoping to tap into anger about inequality. When the average middle-class worker in the US is, "paying more in taxes than people making $50m, $60m a year, we've got to change that," said David Plouffe, a political adviser to the President.