Politicians are too obsessed with budget cuts when they actually should spend more on public works projects that would create jobs, the head of the nation's largest union federation said Wednesday.

AFL-CIO president Richard Trumka said the rush to trim federal and state budgets was shortsighted, would hurt middle-class workers and do little to spur economic growth.

"Too many of our politicians are doing the opposite of what works," Trumka said in a speech at the National Press Club. "Destroying our public institutions, crushing working people's rights and living standards and failing to invest in education. We know this model, and we know where it leads — catastrophe."

Unions face growing hostility from Republican-led state legislatures, and unionized public employees are trying to fend off cuts to salaries, pensions and other benefits.

Trumka also offered a subtle challenge to President Barack Obama, who has worked to mend ties with business.

He accused Washington politicians of living in "an Alice-in-Wonderland political climate" where the wealthy get tax cuts but "we cannot fund the basic functions of government, let alone invest to build the infrastructure of the future."

Union leaders are urging Obama and other leaders to spend trillions of dollars on high-speed mass transit, smart utilities and roads and bridges.

Trumka said the U.S. is falling behind the global economy because "we have let our transnational business titans convince our politicians that our national strength lies in their profits, not our jobs."

Asked if he is concerned about Obama's recent overtures to business groups, Trumka acknowledged some frustration, but laid most of the blame on Republicans for trying to obstruct the president's agenda.