WASHINGTON (AP):

President Barack Obama embraced merit pay for teachers yesterday in spelling out a vision of education that will almost certainly alienate union backers.

A strategy that ties teacher pay to student performance has for years been anathema to teachers' unions, a powerful force in the Democratic Party. These unions are also wary of charter schools, non-traditional educational systems that they believe also compete with traditional schools for tax dollars.

Obama, however, also spoke favourably of charter schools, saying that where they work, they should be encouraged.

He did acknowledge in his speech to the United States Hispanic Chamber of Commerce that his proposals could meet heavy resistance in the education establishment.

"Too many supporters of my party have resisted the idea of rewarding excellence in teaching with extra pay, even though we know it can make a difference in the classroom," he said, delivering the first major education speech of his presidency. "Too many in the Republican Party have opposed new investments in early education, despite compelling evidence of its importance."

Economic imperative

But he argued that a far-reaching overhaul of the nation's education system is an economic imperative that can't wait, despite the urgency of the financial crisis and other pressing issues.

"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 said.

"The relative decline of American education is untenable for our economy, unsustainable for our democracy and unacceptable for our children. We cannot afford to let it continue. What is at stake is nothing less than the American dream."

The ideas the president promoted were nearly all elements of his campaign platform last year. He only barely mentioned the reauthorisation of the Bush-era No Child Left Behind Act, which introduced sweeping reforms that schools are struggling to meet without the funding to match.

Obama said his administration would "later this year" ensure that schools get the funding they need and that the money was conditioned on results.