WASHINGTON -- U.S. President Barack Obama prodded Congress to raise wages and secure the social safety net as he issued an overarching appeal Wednesday to correct economic inequalities that he said make it harder for a child to escape poverty. "That should offend all of us," he declared. "We are a better country than this."

Focusing on the pocketbook issues that Americans consistently rank as a top concern, Obama argued that the dream of upward economic mobility is breaking down and that the growing income gap is a "defining challenge of our time."

"The basic bargain at the heart of our economy has frayed," the president said in remarks at a non-profit community centre a short drive from the White House in one of Washington's most impoverished neighbourhoods.

Though he offered no new initiatives, Obama blended a call for Congress to act on pending short-term economic measures with an ambitious vision aimed at rectifying a growing level of income inequality in the United States. Amid public doubts over Obama's stewardship of the economy, the speech served as a guide for the remaining three years of his term.

Still, by drawing attention to past policy proposals that have dead-ended in a divided government, Obama also laid bare the political failures and economic difficulties he has faced trying to halt widening inequality trends.

He acknowledged his administration's "poor execution" in rolling out the flawed health care website that was supposed to be an easy portal for purchasing insurance, while blaming Republicans for a "reckless" shutdown of the government.

"Nobody has acquitted themselves very well these past few months," Obama said. "So it's not surprising that the American people's frustrations with Washington are at an all-time high." Worse for Americans, he added, are their growing difficulties in trying to make ends meet no matter how hard they work.

The speech coincided with growing national and international attention to economic disparities -- from the writings of Pope Francis to the protests of fast-food workers in the U.S. Obama recalled the pope's words, the deeds of past presidents as well as his own personal story as a young boy with a financially struggling mother.

And he noted that in the United States, a child born into the bottom 20 per cent of income levels has less than a 5 per cent chance of making it to the top income levels and is 10 times likelier to stay where he is -- worse than other industrial countries such as Canada, Germany and France.

House Speaker John Boehner blamed Senate Democrats and Obama for the lack of action on jobs-related legislation. He said bills passed by the Republican-controlled House that would help the economy and create jobs have been blocked in the Democratic-controlled Senate. "The Senate and the president continue to stand in the way of the people's priorities," he said on the House floor.

Obama conceded that "the elephant in the room" is the political gridlock that has prevented congressional action. But he pointed to the health care law, despite its troubled enrolment launch, as one example that he said is already helping families by providing insurance coverage to more Americans and by pushing down the costs of health care.

Obama specifically called on Congress to increase the federal minimum wage from the current $7.25 an hour. A Democratic bill by Sen. Tom Harkin of Iowa would raise the threshold to $10.10 an hour in three steps and tie automatic annual increases to changes in the cost of living.

A vote in the Senate is not expected in December, when the chamber will mostly focus on stalemates over the budget and other issues. Whenever it is debated, the measure seems unlikely to win the 60 votes it would need to clear the Senate due to GOP opposition.

Obama also pressed Congress to extend jobless benefits to 1.3 million long-term unemployed people. The benefits are set to expire just three days after Christmas. The additional weeks of benefits have been extended each year since 2009, but a senior Republican lawmaker, Rep. Tom Cole of Oklahoma, said Tuesday that lawmakers in his party oppose yet another extension.