The US is facing tough competition for "good jobs" from emerging economies like India and China, President Barack Obama said.

"We live in a world where America is facing stiff competition for good jobs from rapidly growing nations, like China and India and Brazil," Obama said in his remarks at an event in Philadelphia.

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"For a long time we were told the best way to win that competition is just to undermine consumer protections and undermine clean air laws and clean water laws and hand out tax breaks to millionaires and billionaires. That was the idea that held sway for close to a decade. And let's face it, it didn't work out very well," he said.

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Obama said he believes in business and free markets.

"But we also believe in making sure that every kid in this country has a chance. And we believe that our seniors deserve to retire with dignity and respect and have some semblance of security. We believe in making investments in science and technology. We believe in having the best infrastructure in the world. So the same things that worked for us in the past, that's what we need to be doing today."

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Referring to talks in the Senate over possible debt default, he said there is an important debate in Washington on how to cut the deficit, "and let me say it is absolutely critical that we get a handle on our finances."

"We've spent a lot of money that we don't have. And we've made a lot of commitments that are going to be hard to keep if we do nothing. And like families all across America, government has to live within its means," Obama said.

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As such, Obama said, he is prepared to bring the deficit down by trillions of dollars.

"But I will not reduce our deficit by sacrificing our kids' education. I'm not going to reduce our deficit by eliminating medical research being done by our scientists.  I won't sacrifice rebuilding our roads and our bridges and our railways and our airports," he said referring to the debate going on between the White House and the Republicans.

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"Not just roads and bridges and sewer mains and water systems; I want us to have the best broadband -- the best electric grid. I'm not going to sacrifice clean energy at a time when our dependence on foreign oil is causing so many Americans pain at the pump. That's sacrificing America's future."

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The President said: "It would be irresponsible, we would be mortgaging our future, if we don't do anything about the deficit. But we will also be mortgaging our future and it will be irresponsible if, in the process of reducing our deficit, we sacrifice those very things that allow us to grow and create jobs and succeed and compete in the future."

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Obama said: "What makes America great is not just the height of our skyscrapers or the might of our military or the size of our GDP. What makes us great is the character of our people."

"We are rugged individualists -- that's part of what makes us American; we like to make up our own minds and we don't like other people to tell us what to do. But what also makes us who we are is our faith in the future and our recognition that our future is shared."

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