US President Barack Obama. - File Photo

WASHINGTON: US President Barack Obama on Monday nominated Alan Krueger, a Princeton University expert on unemployment, as his top economic adviser as he plots an “urgent” new offensive on the jobs crisis.

Obama described Krueger as one of America's top economists who understood the challenges that the country faces, with a recovery that has been too tepid to make significant cuts in an unemployment rate of 9.1 per cent.

Krueger, if confirmed by the Senate, will serve as chairman of the Council of Economic Advisers and succeed long-time Obama confidante Austan Goolsbee who left the administration to return to academia in Chicago.

Next week, the president will lay out a new plan to create jobs and slice into the deficit, projected to hit dollar 1.6 trillion this year, in a speech certain to ignite a new political firestorm with Republicans.

“Our great economic challenge as a nation remains how to get this economy growing,” Obama said as he appeared with Krueger in the White House Rose Garden and previewed his big speech.

The president promised “steps that Congress can take immediately to put more money in the pockets of working class families and middle class families and to make it easier for small businesses to hire people.

“That's our urgent mission, and that's what I'm fighting for every single day,” he said.

“My hope and expectation is we can put country before party and get something done for the American people. That's what I will be fighting for.”

The president is pushing for an extension to a current payroll tax cut, an infrastructure spending plan that would provide jobs for construction workers and an initiative to put returning Afghan and Iraq war veterans to work.

The White House says that Obama is also interested in finding deficit cuts that go beyond the current dollar 1.5 trillion mandate of a congressional supercommittee set up to recommend multi-year spending reductions.

Republicans in the House of Representatives, however, have already signaled that they oppose some of Obama's likely policy prescriptions and say the best way to stimulate growth would be to loosen government control over the economy.

Eric Cantor, the Republican majority leader in the House, on Monday pledged to push for the repeal of “job destroying regulations” he said had tied the hands of small business owners.

In a memo to his members, he also committed the House to pursue tax relief for small business owners which he said would immediately help create jobs.

The battle lines of a new Republican showdown with Obama are clear however, with both sides smarting from a fierce row over raising the government's borrowing limit in July.

The president, seeking a “balanced” approach to deficit reduction, wants to close corporate tax loopholes and says the richest Americans should see their rates rise as they can afford to shoulder more of the economic burden.

But Republicans say such tax hikes would, in effect, be a new tax on small businesses, and are pushing instead for spending cuts which Democrats could further cripple the recovery.

The Wall Street Journal, which first reported Krueger's appointment, said the new CEA chief would likely prove to be an advocate for more concerted action by the government to tackle high unemployment.

He served as assistant treasury secretary for economic policy during Obama's first two years in the White House and was also chief economist for the Treasury and the US Department of Labor.

Krueger also wrote a well-reviewed book called “What Makes a Terrorist” which examined the societal, economic and political conditions that breed terrorism and their psychological and economic consequences.

Republicans, however, mined Krueger's long list of published articles and comments to argue he was wedded to increasing taxes, more environmental regulation and had incorrectly predicted the extent of the jobs crisis.

The CEA is a three-member body that interprets prevailing economic conditions and provides policy recommendations to the president.