Scott Horsley

Deficit reduction takes a back seat to job growth in the federal budget President Obama will unveil Monday. The spending plan forecasts more red ink in the current fiscal year than in 2011. Under the president's plan, budget deficits wouldn't reach a sustainable level until 2018.

The White House is trying to mend fences with Catholics and others who were outraged at a new rule governing insurance coverage for birth control.

That policy would have required Catholic hospitals, universities and other institutions to cover birth control in their employees' health insurance. Critics called that an assault on religious freedom.

President Obama announced a change of course Friday, and the White House is hoping to regain religious allies and maintain support from the women who voted for the president.

A Change Of Policy

It turns out January was a surprisingly good month in the job market. U.S. employers added 243,000 jobs in January, and the unemployment rate fell to 8.3 percent.

That better-than-expected news from the Labor Department triggered a rally in the stock market Friday, with the Dow climbing more than 150 points. The news could also help the stock of President Obama.

A day after delivering his State of the Union address to Congress, President Obama took his message on the road. Obama hoped that stops at manufacturing sites in Iowa and Arizona would drive home his point that the government should do more to encourage factory jobs.

The three-day trip also includes stops in Colorado, Nevada and Michigan. Those are all states likely to be important in the November election.

Obama kicked off his road trip at Conveyor Engineering and Manufacturing, a factory in Cedar Rapids, Iowa.

The widening gulf between the rich and everyone else is a growing source of tension in America.

A new survey from the Pew Research Center finds the income gap is now seen as a bigger source conflict in the U.S. than race, age or national origin. That's why some believe the issue could matter in the presidential campaign, and others worry it would warp the national debate.

Two out of three Americans now perceive strong social conflicts over the income gap — up sharply from two years ago. Paul Taylor of the Pew Research Center has an idea what's behind the increase.

The central argument of Republican Mitt Romney's presidential campaign is that he understands how the economy works — thanks to his business background — in a way that President Obama does not.

Democrats have been challenging the former Massachusetts governor's claim that the private equity firm he founded helped to create more than 100,000 jobs. Now, some of Romney's Republican rivals are raising questions of their own.

President Obama acknowledged Friday that the economic recovery has a long way to go. Still, he was able to share some good news. The Labor Department reported that U.S. employers added 200,000 jobs in December, and the unemployment rate fell to 8.5 percent.

"Obviously, we have a lot more work to do," he said, "but it is important for the American people to recognize that we've now added 3.2 million new private sector jobs over the last 22 months."

Those better-than-expected numbers could help Obama, as he tries to hang on to his own job.

Even as President Obama relaxes with his family in Hawaii over the holidays, he knows what's on the horizon when he returns to work in Washington.

He will start where he left off, facing new skirmishes with Congress over a push to extend a temporary cut in payroll taxes. That temporary extension was approved just days before Christmas after a high-stakes gamble that finished only after most of Congress had left for the year.

First in a series

Visiting a metal fabrication plant in Sioux City this December, Mitt Romney touted his successful business background, saying those qualifications are what America needs right now.

"I want to use the experience I have in the world of the free enterprise system to make sure that America gets working again... These are tough times," said the Republican presidential candidate. "You guys have jobs. Hope your spouses do. But I know these are tough times."

But not as tough in Iowa as in many other parts of the country.

President Obama doesn't have to worry about winning the Jan. 3 Iowa caucuses. He's almost sure to be the only Democrat in the first-in-the-nation contest. Yet, that hasn't stopped the Obama campaign from organizing its own effort to get out the vote.

"Hi, my name is Margaret, and I'm a volunteer with President Obama's grassroots team, Organizing for America," says Margaret LaBounty during a recent phone drive.