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Obama seeks to reverse Bush labor policies

Obama, who won significant backing from trade unions in his Democratic presidential campaign, said there could not be a strong middle class, the focus of his economic recovery plan, without a strong labor movement.

"I believe we have to reverse many of the policies toward organized labor that we have seen over the past eight years, policies with which I have sharply disagreed," Obama told a gathering at the White House.

"Labor is not part of the problem, it is part of the solution," he said to loud applause from an audience that included representatives of labor unions and business groups.

He spoke on a day when new data showed the U.S. economy shrinking at its fastest rate in nearly 27 years and a day after the number of Americans seeking jobless benefits hit a record high.

"The recession is deepening and the urgency of our economic crisis is growing," Obama said. "This is a continuing disaster for America's families."

He announced the formation of a task force with a wide-ranging brief to look at ways of raising the living standards of middle-class Americans, one of his signature campaign promises. The task force is to be led by his vice president, Joe Biden.

GIVING LABOR MUSCLE

Obama also signed executive orders that will help shore up unions in the workplace and strengthen the rights of workers.

The first order will prevent taxpayer money from being used to reimburse federal contractors who spend money "trying to influence the formation of unions."

A second will require federal contractors to inform employees of their rights under the National Labor Relations Act. A third will ensure that qualified workers keep their jobs even when a federal contract changes hands.

The Teamsters, one of the most influential U.S. unions, welcomed Obama's action, calling it a "new day for workers."

"We finally have a White House that is dedicated to working with us to rebuild our middle class. Hope for the American Dream is being restored," Teamster General President Jim Hoffa said in a statement.

Obama, who was sworn in on January 20 on a mandate of change, has said that fixing the economy is his top priority. He is pushing Congress to approve a $900 billion stimulus package to jolt the economy out of its worst crisis in decades.

Christina Romer, one of Obama's top economic advisers, said in a statement that Friday's figures showing a 3.8 percent drop in gross domestic product in the fourth quarter made clear that the financial crisis had spread to the whole economy.

"Immediate action to support both the financial sector and overall demand is essential," said Romer, who leads Obama's Council of Economic Advisers.

(Additional reporting by David Alexander; editing by Patricia Zengerle)

Roosevelt did something similar to this and American manufacturing almost went under. Instead of creating jobs, jobs were killed.

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