US invests in R&D to compete with China, India: Obama

Defending his economic policies as the US battles its worst recession in decades, he lashed out at lashed out at Republicans Monday,  saying  that an opposition push to extend the Bush-era tax cuts for people making over $250,000 is unaffordable.

His administration is "in this wrestling match" with the Republican leadership over whether to extend the 2001 and 2003 tax cutes for the richest Americans, Obama said. Doing so would cost another $700 billion, "and we just can't afford it," he declared-a slap at Republican cries for fiscal responsibility.

In an appearance at a private home in the Washington suburbs of Fairfax County, he said what his administration had "tried to do to lay this foundation for long-term economic growth is to put our investments in those things that are really going to make us more competitive over the long term."

"So we have made the largest investment in research and development, in basic research and science, in our history, because that's going to determine whether we can compete with China and India and Germany over the long term," he said.

"The economy is growing, but it's not growing as fast as we would like.  So over the last week, I've put forward a few more things that I think can really make a difference," Obama said returning to his pet theme of not giving tax breaks to companies investing abroad.

"Number one, instead of giving tax breaks to companies that are investing overseas, which our tax code does right now, what I've said is let's close those tax loopholes and let's provide tax breaks to companies that are investing in research and development here in the United States."

"That's a smart thing to do.  We want to incentivize businesses who actually are making profits right now to say, we should go ahead and take a chance, and let's invest in that next new thing," Obama said.

Even today people around the world "still want to be the United States of America," he said, "as we still have a huge competitive edge and we've got the best workers in the world.  And we've got the most dynamic economy in the world.  We've got the best universities, the best entrepreneurs in the world."

"But we've got to tackle these longstanding problems that have been getting in the way of progress, and we've got to do it now," Obama said. "We can't wait another 20 years or another 30 years because other countries are catching up."