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* President to tout economic benefits to CEOs, unions

* Republicans soften stance after rebuke by Hispanic voters

* House panel to take up immigration on Tuesday

By Matt Spetalnick and Richard Cowan

WASHINGTON, Feb 4 (Reuters) – President Barack Obama will

seek to build momentum for U.S. immigration reform this week

ahead of his State of the Union address which is expected to

challenge Republicans to take up an overhaul amid an

increasingly contentious debate in Washington.

Obama plans to hold a series of White House meetings with

corporate chief executives, labor leaders and progressives on

Tuesday to lobby for their support, and he has dispatched

Homeland Security Secretary Janet Napolitano to the Southwest to

tout the administration’s border security efforts.

The flurry of activity, including new moves in Congress,

comes amid disagreement between the Democratic president and

many Republicans over the question of citizenship for illegal

immigrants, an obstacle that could make it hard to reach a final

deal on sweeping legislation.

House Majority Leader Eric Cantor, the second-ranking

Republican in the House of Representatives, will address

immigration reform and other issues in a speech on Tuesday to

the conservative American Enterprise Institute.

In excerpts to that speech, Cantor walked a fine line on

future citizenship for those in the United States illegally. “We

must balance respect for the rule of law and respect for those

waiting to enter this country legally, with care for people and

families, most of whom just want to make a better life and

contribute to America,” he said.

Obama is expected to use his Feb. 12 State of the Union

speech to Congress – a major annual address by the president in

which he lays out his legislative priorities for the year – to

keep the heat on Republicans, who appear more willing to accept

an immigration overhaul after they were chastened by Latino

voters’ rejection in the November election.

But differences have emerged since Obama and a bipartisan

Senate working “group of eight” rolled out their proposals last

week aimed at the biggest U.S. immigration revamp in decades.

Obama wants to give America’s 11 million illegal immigrants

a clear process to achieve citizenship, including payment of

fines, criminal background checks and going to the “back of the

line” behind legal applicants. He has vowed to introduce his own

bill if Congress fails to act in a timely fashion.

But top Republicans want to defer citizenship until the

county’s borders are deemed more secure – a linkage that Obama

and most of his fellow Democrats would find hard to accept.

Obama’s aides are confident the president has enough

leverage to avoid giving ground – not least because they believe

that if the reform effort fails in Congress, voters are more

likely to blame the Republicans and they would suffer in the

2014 midterm congressional elections.

The Republican strategy could soon become clearer. The

Judiciary Committee of the Republican-controlled House of

Representatives, where reform faces the toughest fight, will

kick off hearings on Tuesday with a broad look at the

immigration system and border security.

A congressional Democratic aide said Republicans have lined

up a set of witnesses that is “a lot more balanced than you

would have seen in previous Congresses, when you would have seen

hard-line enforcement-only advocates be front and center.”

SETTING NEW TONE

A number of leading Republicans, worried that their party

has alienated Hispanics with anti-immigrant rhetoric, have made

clear they want to set a new tone with the fast-growing Latino

electorate. More than 70 percent of Hispanic voters backed Obama

in the Nov. 6 presidential election.

Immigration reform advocates will be watching the hearing

closely to see whether Republicans mostly stress piecemeal

reforms, such as more border security and encouraging more guest

workers and high-tech visas, rather than the comprehensive

reforms that Obama and the Democrats are seeking.

Some conservatives have warned that the reform efforts now

taking shape essentially could offer “amnesty” for law-breakers.

A bipartisan House group has been working behind the scenes

on a reform package they hope to unveil before the State of the

Union. But it was unclear whether they would meet that goal.

Underscoring the difficulty of resolving such a volatile

issue, Republican Jeff Sessions, a senior member of the Senate

Judiciary Committee, on Monday introduced narrow legislation

aimed at removing illegal immigrants from the workplace.

“Before considering some broad-based amnesty, shouldn’t we

finally deliver for the American people on the enforcement of

those laws already in place? What good are new promises when old

ones are being broken,” Sessions said.

At the White House on Tuesday, Obama will try to rally

business and labor leaders with a sales pitch that immigration

reform will be good for the fragile U.S. economy and help boost

job creation, administration officials said. The White House

declined to immediately name those who planned to participate.

Napolitano was headed to San Diego on Monday and El Paso,

Texas, on Tuesday to inspect security on the border with Mexico

and meet state and local officials. Border security is expected

to be a tough area for legislative compromise.

Obama and his aides have argued that his administration has

made strides in tightening controls at the border, resulting in

fewer people trying to cross over from Mexico. But some

Republicans say more must be done to prevent an increased flow

of illegal immigrants once the U.S. economy improves.