The withdrawal of the proposed regulation marks the latest in a string of retreats by Obama in the face of Republican opposition. Last December, he shelved, at least until the end of 2012, his insistence that Bush-era tax cuts should no longer apply to the wealthy. Earlier this year he avoided a government shutdown by agreeing to Republican demands for budget cuts. And this summer he acceded to more than a $1 trillion in spending reductions, with more to come, as the price for an agreement to raise the nation's debt ceiling.
A spokesman for House Speaker John Boehner, R-Ohio, had muted praise for the White House, saying that withdrawal of the smog regulation was a good first step toward removing obstacles that are blocking business growth.
"But it is only the tip of the iceberg when it comes to stopping Washington Democrats' agenda of tax hikes, more government 'stimulus' spending, and increased regulations, which are all making it harder to create more American jobs," Boehner spokesman Michael Steel said.
Obama had initially set out to correct a weaker standard set by President George W. Bush. Jackson had said in July that the standard would not survive a legal challenge because it did not follow the recommendations of the agency's scientific advisers.
In March, the independent panel said in a letter to Jackson that it was unanimous in its recommendation to make the smog standard stronger and that the evidence was "sufficiently certain" that a range proposed in January 2010 under Obama would benefit public health.
The White House, which has pledged to base decisions on science, said Friday that the science behind its initial decision needed to be updated, and a new standard would be issued in 2013.
Major industry groups had lobbied hard for the White House to abandon the smog regulation, and applauded Friday's decision.
"The president's decision is good news for the economy and Americans looking for work. EPA's proposal would have prevented the very job creation that President Obama has identified as his top priority," said Jack Gerard, president and CEO of the American Petroleum Institute.
The withdrawal of the proposed EPA rule comes three days after the White House identified seven such regulations that it said would cost private business at least $1 billion each. The proposed smog standard was estimated to cost anywhere between $19 billion and $90 billion, depending on how strict it would be.
However, the Clean Air Act does not allow the EPA to consider how much it will cost to comply when picking a new standard.
Republican lawmakers have blamed what they see as excessive regulations backed by the Obama administration for some of the country's economic woes, and House Republicans pledged this week to try to block four environmental regulations, including the one on some pollution standards, when they return after Labor Day.
But perhaps more than some of the other regulations under attack, the ground-level ozone standard is most closely associated with public health something the president said he wouldn't compromise in his regulatory review. Ozone is the main ingredient in smog, which is a powerful lung irritant that occasionally forces cancellation of school recesses, and causes asthma and other lung ailments.
A stronger standard, while it would cost billions, would also save billions in avoided health care costs and hospital visits.
Criticism from environmentalists, a core Obama constituency already battling him over a planned oil pipeline from Canada to the Gulf Coast, was swift following the White House announcement.
"The Obama administration is caving to big polluters at the expense of protecting the air we breathe," said Gene Karpinski, the president of the League of Conservation Voters. "This is a huge win for corporate polluters and huge loss for public health."
In his statement, the president said that withdrawing the regulation did not reflect a weakening of his commitment to protecting public health and the environment.
"I will continue to stand with the hardworking men and women at the EPA as they strive every day to hold polluters accountable and protect our families from harmful pollution," he said.
The decision mirrors one made by Obama's predecessor, President George W. Bush. EPA scientists had recommended a stricter standard to better protect public health. Bush personally intervened after hearing complaints from electric utilities and other affected industries. His EPA set a standard of 75 parts per billion, stricter than one adopted in 1997, but not as strong as federal scientists said was needed to protect public health.
The EPA under Obama proposed in January 2010 a range for the concentration of ground-level ozone allowed in the air from 60 parts per billion to 70 parts per billion. That's about equal to a single tennis ball in an Olympic-size swimming pool full of tennis balls.
Jackson, Obama's environmental chief, said at the time that "using the best science to strengthen these standards is a long overdue action that will help millions of Americans breathe easier and live healthier."
The American Lung Association, which sued the EPA over the Bush standard, said it would continue its legal fight now that Obama is essentially endorsing the weaker limit. The group had suspended its lawsuit after the Obama administration vowed to correct it.
Associated Press writer Jim Kuhnhenn contributed to this report.