"This is the defining issue of our time. It is a make-or-break moment for the middle class," he said.
He chose a small town near Kansas City, Osawatomie, because 101 years ago a former president spoke about income inequality in the same place.
"Teddy Roosevelt came here, to Osawatomie, and laid out his vision for what he called a New Nationalism," Obama said.
President Obama described Roosevelt as the Republican son of a wealthy family who turned into a progressive and argued it's the government's role to regulate wealth and protect workers.
"For this, Roosevelt was called a radical, a socialist, even a communist," President Obama said.
President Obama has heard the same thing in endless battles with Republicans over tax breaks for the middle class , which he wants to offset with tax hikes on millionaires.
"I was surprised to see the president today in Kansas," GOP presidential hopeful Mitt Romney said. "He made an unusual comparison. He said that he is like Teddy Roosevelt and I thought, 'In what way is he like Teddy Roosevelt? Teddy Roosevelt of course founded the Bull Moose Party. One of those words applies. When this president is talking about how he helped the economy, one of those words applies."
Meanwhile, a new ABC News-Washington Post poll has former house speaker Newt Gingrich firmly in the lead in Iowa, but the scrutiny and attacks are heating up.
Ron Paul released a blistering new ad against Gingrich that will start running Wednesday in Iowa on Fox News.
Romney is now going to have to go on the attack to score some points with Iowa voters. He will get his chance at 6 p.m. Saturday when ABC News hosts a Republican presidential candidate debate in Iowa.
It will be moderated by Diane Sawyer and George Stephanopoulos.