Obama, facing a tough re-election fight next year, looked to stem the eroding confidence in his leadership as the mood of Americans darkens and Republican presidential challengers assail his record.
The newest and boldest element of Obama's plan would slash the payroll tax for the Social Security pension program both for tens of millions of workers and for employers, too. It also includes $105 billion in public works projects and the renewal of $50 billion in unemployment benefits for about 6 million Americans at risk of losing jobless insurance.
Obama promised to pay for his plan without sinking the United States deeper in debt.
"This plan is the right thing to do right now," Obama said after a divided body rose in warm unison to greet him. "You should pass it. And I intend to take that message to every corner of this country."
The proposals could have more of a political impact than an economic one.
Obama will likely have a hard time getting much of his plan through Congress. Republicans control the House of Representatives and can use procedural tactics to block bills in the Senate.
Beyond their ideological opposition to Obama's plans, Republicans would seem hesitant to hand Obama a major legislative victory that could boost his re-election prospects.
Even before the speech, the top Republican in the Senate, Mitch McConnell, described Obama's expected ideas as retreads, saying: "This isn't a jobs plan. It's a re-election plan."
By challenging Republicans on their own turf, Obama can try to show the voters watching at home, particularly independents, that he isn't the one to blame for inaction.
"The question is whether, in the face of an ongoing national crisis, we can stop the political circus and actually do something to help the economy," Obama said.
But Obama's plan could reinforce the political battle lines ahead of the November 2012 vote. Republicans cast Obama as swelling the deficit with reckless spending and proposing what they call job-killing tax increases. Democrats cast Republicans as out of touch with an American public that wants to see the government do more to create jobs and favours a mix of spending cuts and tax increases to bring down deficits.
Obama was re-offering proposals that had been rejected by Republicans during summer negotiations on increasing the government's borrowing authority: closing corporate tax loopholes and increasing taxes on wealthier Americans.
Still, some Republican leaders, under their own pressure from constituents to get results, offered signs of compromise before Obama spoke.
"The American people want us to find common ground, and I'm going to be looking for it," the top House Republican, Speaker John Boehner, told reporters.
To pay for his plan, Obama challenged a new debt panel in Congress to go beyond its charge of identifying $1.5 trillion in deficit reduction, so the extra savings could offset the cost of short-term stimulus ideas. That panel met for a first time Thursday.
Obama remains personally popular and a formidable campaigner. But his approval ratings keep tumbling and no incumbent president in recent history has won re-election with the unemployment rate anywhere near the current level, 9.1 per cent.
About 14 million people are unemployed. There is just one job opening available for every four job seekers, on average, in the richest nation on earth.
In one striking sign of discontent, nearly 80 per cent of people think the country is headed in the wrong direction. That's about the same level of pessimism as when Obama took office. It reflects both persistently high unemployment and disgust with Washington infighting.
Obama took office in the midst of recession that began in December 2007 and ended in June 2009, costing America a staggering 7.5 million jobs. Even though many voters are spreading blame around, Obama owns the economy now and his political strategy of putting the onus on Congress holds risk.
If nothing comes of his jobs program and he tries to blame Congress, he will still be the most identifiable target for voter ire.
Associated Press writers Ben Feller, David Espo, Jim Kuhnhenn, Julie Pace, Christopher S. Rugaber, Larry Margasak and Ken Thomas contributed to this report.