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(Updates with Obama quotes in Denver)

* Says millions of students getting “third world” education

* Accuses Obama of being unwilling to stand up for kids

* Pivot to education comes during battle over student loans

By Sam Youngman

WASHINGTON, May 23 (Reuters) – Republican presidential

candidate Mitt Romney opened a new front on Wednesday in his

fight against President Barack Obama, accusing him of presiding

over a failing U.S. education system in the grip of union

bosses who refuse to accept reforms.

In a rare diversion from his campaign focus on the weak U.S.

economy, Romney laid out an education plan in a speech that

represented his most overt appeal to date to Hispanic voters who

have largely sided with the Democratic incumbent.

Although he trails Obama by a huge margin among Hispanics,

Romney’s address to a Hispanic business group avoided mentioning

a top priority for them: how to overhaul the country’s

immigration system.

Romney said millions of American children are getting a

“third-world education” and offered proposals that he said would

reward teachers for their results instead of their seniority.

And he would give parents greater choice of where to send their

children to school and take other steps to reduce the influence

of powerful teachers’ unions.

“I believe the president must be troubled by the lack of

progress since he took office. Most likely, he would have liked

to do more. But the teachers unions are one of the Democrats’

biggest donors – and one of the president’s biggest campaign

supporters. So, President Obama has been unable to stand up to

union bosses – and unwilling to stand up for kids,” Romney said.

Meanwhile, at a rally in Denver, Obama kept up criticism of

his opponent’s record as a job-cutting business executive – a

prime target for the president and his re-election campaign.

“I think he has learned the wrong lessons,” Obama said,

pressing a populist attack on what he called Romney’s bad ideas

for the U.S. economy.

“His working assumption is if CEOs, and wealthy investors

like him get rich, the rest of us automatically will too,” he

said.

There has been increasingly heated rhetoric between the two

in recent days over Romney’s time as the head of the corporate

buyout company Bain Capital.

Obama made only a brief mention of education, repeating his

plans to enhance ties between community colleges and businesses

and saying his goal was that “by the end of this decade more of

our citizens hold a college degree than any other nation on

Earth.”

Romney’s pivot to education comes during a battle in

Washington over student loan programs. Obama’s Democrats are

pushing for extending low-interest loan rates for federal loans

to avoid a doubling of the rates from 3.4 percent. A compromise

with Republicans is expected by the July 1 deadline.

The former Massachusetts governor is neck-and-neck with

Obama in polls, a prelude to what could be a close election.

HISPANICS AND EDUCATION

Hispanics will likely be crucial to the election.

A Wall Street Journal/NBC/Telemundo poll showed Obama

leading Romney with Hispanic voters 61 percent to 27 percent.

Romney is only now starting a push to try to peel some of them

away because of their potential influence in swing states like

New Mexico, Florida, Colorado, Virginia and North Carolina.

But Romney went almost an hour at his event without

mentioning the U.S. immigration system and how he would deal

with 12 million illegal immigrants in the United States.

In the Republican primary battle, Romney and his rivals

upset many Hispanics by adopting hardline immigration positions.

Romney called for the “self-deportation” of illegal immigrants.

On Wednesday he stuck to education, also a top issue for

Hispanics but one that rarely ignites passion in the campaign.

In the meantime, Obama, whose re-election largely hinges on

what happens with the fragile economy and high unemployment,

accused Romney’s Republicans of “bamboozling folks into thinking

that they are the responsible, fiscally disciplined party.”

Seeking to counter Republican charges of wasteful spending,

Obama insisted that the rate of spending has grown less under

Democratic than under Republican administrations.

Hispanic Republican strategists said Romney was wise to keep

his focus on education and the economy, noting that in several

polls, Hispanic voters rate the economy well ahead of

immigration as the issue they care about most.

“Clearly, it appears that Governor Romney has chosen to

focus on what the vast majority of U.S. Hispanics and Latinos

feel is of highest priority,” said Daniel Garza, from The Libre

Initiative non-profit group.

Standing before a banner that read “A Chance for Every

Child,” Romney laid out an education plan that relies heavily on

bolstering and improving the No Child Left Behind education law

engineered by Obama’s Republican predecessor, George W. Bush.

Romney made more money and more access to charter schools

the centerpiece of his platform, but he launched a strong attack

on teachers’ unions. “The teachers’ unions are the clearest

example of a group that has lost its way,” Romney said.

“COME ON MITT, THINK!

The education speech was a welcome break for Romney, who has

been under a barrage of accusations from Democrats that he

killed blue-collar jobs when he was head of Bain in the 1990s.

Bain bought and restructured companies, sometimes resulting

in a loss of jobs. But Romney says the company more than made up

for that by helping to establish companies that became big

employers, like office supplies store Staples.

He told Time magazine business experience gave him

savvy to fix the economy and he welcomed scrutiny of his record.

“The fact is that I spent 25 years in the private sector. And

that obviously teaches you something that you don’t learn if you

haven’t spent any time in the private sector,” he said.

While Romney often polls ahead of Obama on the economy, the

president’s foreign policy credentials weigh in his favor

compared to the ex-governor, who has little foreign experience.

Former U.S. Secretary of State Colin Powell criticized

Romney for taking advice from foreign policy advisers who are

“quite far to the right,” in an sign of lingering strains from

his tenure under President George W. Bush.

He made clear that he is not happy with some of the

neo-conservatives who are advising Romney and took exception to

a recent comment from Romney that Russia is the top U.S.

geopolitical threat.

“Come on Mitt, think! That isn’t the case,” said Powell.

(For more campaign stories, click on )

(Additional reporting by Laura MacInnis in Denver and Matt

Spetalnick in Washington; Writing by Steve Holland; Editing by

Philip Barbara and Xavier Briand)