WASHINGTON (Reuters) - President Barack Obama on Tuesday proposed lengthening the school year and paying top teachers more as part of an effort to help U.S. students regain an edge in the competitive world economy.

The United States has one of the worst high school dropout rates in the industrialized world, and its students regularly rank far below those in other Western countries in reading and math scores.

Slightly more than half of the population has only a high school diploma. One out of every two American university students drops out before completing their post-secondary studies.

“Despite resources that are unmatched anywhere in the world, we have let our grades slip, our schools crumble, our teacher quality fall short and other nations outpace us,” Obama told the U.S. Hispanic Chamber of Commerce.

“The future belongs to the nation that best educates its citizens, and my fellow Americans, we have everything we need to be that nation,” he added.

The U.S. leader painted the education drive as part of a broader push to promote economic growth in the face of a deep recession and the nation’s worst financial crisis in decades.

His plan includes a focus on “cradle to career” learning and expansion of early childhood education programs, which received $5 billion in funding in the $787 billion economic stimulus package recently approved by Congress.

SOME PROPOSALS UNPOPULAR

Obama, who in his first 50 days in office has launched drives to overhaul healthcare and energy policy, plans to nearly triple spending on education in the 2010 fiscal year, which begins on October 1.

The funding includes an $81 billion set-aside for education in the economic stimulus package, which would raise the Education Department’s budget for next year to $127.8 billion from $46.2 billion in 2009.

But the new education proposals risk angering teachers’ unions, who are generally strong supporters of his Democratic Party and have in the past resisted ideas such as extra pay for top-performing teachers.

Obama also acknowledged that students would be unhappy about spending more time in class. “I know longer school days and school years are not wildly popular ideas,” he said to laughter.

But he noted that students in other nations, such as South Korea, spent as much as a month more in school each year.

President Barack Obama speaks at the U.S. Hispanic Chamber of Commerce 19th Annual Legislative Conference in Washington March 10, 2009. REUTERS/Larry Downing

Obama called for steps to ensure all Americans received a comprehensive education that followed them from infancy through the job market and ensured that they were competitive in the changing global economy.

“In a 21st century world where jobs can be shipped wherever there’s an internet connection, where a child born in Dallas is competing with children in Delhi ... education is no longer just a pathway to opportunity and success, it is a prerequisite,” he said.

Obama also challenged U.S. states to adopt more rigorous education standards, especially in reading and math, and called for expansion and redesign of federal student aid programs.

Following his speech to the Chamber, he made a surprise visit to a conference of top state school officials in Washington, urging them to keep up efforts to improve the country’s educational system.