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Obama's State of the Union Speech Signals Shift From Health Care to Jobs, Education

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In this January 21, 2010 file photo, President Obama speaks about financial reform after his meeting with Presidential Economic Recovery Advisory Board Chair Paul Volcker at the White House. (Reuters)

President Obama is shifting gears for the second year of his administration -- turning his attention to job creation and education reform -- a refocus that he will spell out for the nation when he delivers his first State of the Union address Wednesday night, a senior administration official told Fox News.

The shift away from health care reform and climate change demonstrates the impact last week's Republican win in the Massachusetts Senate race has had on the president's agenda. Scott Brown's victory gave the GOP the votes it needs in the Senate to block Obama's most ambitious -- and partisan -- goals.

On Wednesday night, Obama will call for swift action on bills that would provide tax cuts for job creation, new equipment purchases and the elimination of capital gains for small businesses.

Treasury Secretary Timothy Geithner will lead the charge, but other Cabinet secretaries will fan out to push the initiatives in the upcoming weeks.

The choice of Geithner to quarterback the plan is sure to raise eyebrows; the treasury secretary has been criticized by many lawmakers for decisions that were made in bailing out American International Group Inc. and that might have cost billions more than necessary.

Geithner was defending his role in the bailouts Wednesday before a House oversight committee, denying that he was involved in withholding information about deals that sent billions from the AIG bailout to big banks.

Many of the proposals the president will discuss Wednesday night date back to his campaign but have drawn little notice in a Congress preoccupied with trying to pass health care reform.

Obama will also propose a major increase -- as much as $4 billion -- in federal spending on education in an effort to revamp the No Child Left Behind law enacted under George W. Bush.

"The president will highlight his commitment to education reform in the State of Union," an official told Fox News, "including his plan to improve outcomes for students at every point along the educational pipeline."

The White House is still feeling the jolt of last week's special Senate election in Massachusetts, when the Democrats lost the  seat held for nearly a half-century by the late Sen. Edward Kennedy. The vote was widely viewed as a symbol of frustration with the economy and the Democrats who control the White House and both houses of Congress.

So Obama will try to recast his message to address people's daily concerns. That starts with creating more jobs at a time of 10 percent unemployment and extends to all the other topics he will address, including the government's ongoing habit of spending more money than it has.

On Thursday, Obama intends to award $8 billion in stimulus funds to develop high-speed rail corridors and sell the program as a jobs creator.

Obama and Vice President Biden plan to announce grants for 13 major rail corridors during a town hall meeting in Tampa, Fla., the president's first public appearance following his State of the Union address. It's an attempt by the White House to show that getting Americans back to work is the president's top priority and that he has a plan for how to do it.

An administration official said the projects are expected to create or save tens of thousands of jobs in areas like track-laying, manufacturing, planning and engineering, though there is no timeframe for how long it will take for those jobs to develop.

Fox News' Major Garrett contributed to this report.