"The only thing that is holding us back is our politics," the president told the crowd, pointing to "the refusal of a faction in Congress to put country ahead of party."
"That has to stop," he said to cheers and applause. "Our economy can't afford it."
Obama said his administration would ramp up efforts to get capital to small businesses in rural areas, speed development of next-generation biofuels to promote renewable energy and conservation, and help small hospitals recruit doctors and nurses.
"But we could do even more if Congress is willing to get in the game," he said. He blamed the Republican opposition for stalling three trade deals and an extension of payroll-tax relief.
Republicans have criticized Obama's trip across three battleground states he easily won as a candidate in 2008 - Minnesota, Iowa, and Illinois - as little more than a campaign swing disguised as an official presidential trip. House Speaker John A. Boehner (R., Ohio) on Tuesday rapped it as a "mission to save his own job," saying that Obama had yet to offer much in the way of new ideas for job creation.
The president told another Iowa audience Monday that he would offer a "very specific plan to boost the economy, to create jobs, and to control our deficit" when Congress returns to Washington in September.
Obama goes on his own summer break Thursday to Martha's Vineyard, the elite resort island off the Massachusetts coast, after wrapping up his bus tour Wednesday with two town-hall meetings in his home state of Illinois.
White House officials would give no more details on what the president might propose, but Obama sought to assure the crowd of small farmers and small business owners that "we want to leave no stone unturned when it comes to strengthening this economy." He and several cabinet secretaries met in sessions with local business leaders, seeking their ideas for job creation.
"America is going to come back from this recession stronger than before. That I'm convinced of," Obama said. "And I'm also convinced that comeback isn't going to be driven by Washington."
Farmers in at least one group complained about too much regulation, particularly from the Environmental Protection Agency. "People are scared to death of what could be next," Gary Kregel, the president of the Dairy Foundation, told Agriculture Secretary Tom Vilsack.
As he did on his first day, Obama met with a largely friendly crowd, though protesters hoisted signs at the entrance to the community college that read "I Don't Trust You" and "Economy: Barack Bottom."
Inside, Mike Blouin, the president of the Greater Dubuque Development Corp., sounded a theme that others along the tour have stressed: that Obama is doing the best he can, given Republican opposition.
"He walked into a nightmare," Blouin said. "The Republicans were gunning from Day One."