In a rare speech to Congress, he said a new-look debt reduction would be announced on 19 September.
It will pay for his ambitious proposals – estimated at some $450bn (£282bn) – which are designed to create more jobs and cut taxes, he said.
US unemployment is currently 9.1% and is expected to dominate the 2012 presidential election campaign.
In a rare address to a joint session of Congress, he said he wanted to get the unemployed back to work, put money in employees’ pockets and rebuild infrastructure, reports the BBC.
“I am sending this Congress a plan that you should pass right away. It’s called the American Jobs Act,” Obama said in his speech late on Thursday.
“There should be nothing controversial about this piece of legislation. Everything in here is the kind of proposal that’s been supported by both Democrats and Republicans – including many who sit here tonight. And everything in this bill will be paid for. Everything.
“The purpose of the American Jobs Act is simple: to put more people back to work and more money in the pockets of those who are working. It will create more jobs for construction workers, more jobs for teachers, more jobs for veterans, and more jobs for the long-term unemployed.
“It will provide a tax break for companies who hire new workers, and it will cut payroll taxes in half for every working American and every small business.”
The president also said the proposals would help to further develop “a world-class transportation system” in the US and “repair and modernise at least 35,000 schools”.
The president wants to submit the bill to Congress next week.