Obama: 'Our Destiny Remains Our Choice' In his second State of the Union address, the president stressed that to revive the economy, stay globally competitive and "win the future," America must reinvent itself. That will require new government investments in education, renewable energy and infrastructure, he said. And it could set up a battle with Republicans who have vowed to slash federal spending.

Obama: 'Our Destiny Remains Our Choice'

President Obama, in his second State of the Union address — his first before a divided Congress — characterized the challenges facing the nation as between the United States and the rest of the world, and not between Democrats and Republicans.

"Governing," he said, "will now be a shared responsibility between parties."

The ultimate goal, "winning the future," he said, repeatedly, is one that will require America to once again reinvent itself to remain competitive globally. He called for new government investments in education, renewable energy and infrastructure – setting up a possible battle with Republicans who have vowed to slash federal spending.

And he dismissed the Republicans' push to repeal the 2010 health care overhaul by suggesting he's open to some fixes, but not re-fighting an old battle when there is no shortage of new ones.

"This is our generation's Sputnik moment," Obama said, comparing the international economic competition facing the nation today with the day more than a half century ago when the Russians beat the United States into space with a satellite launch.

But in calling for a united push into the future, the president acknowledged the realities of the new Republican majority in the House and expanded minority in the Senate. The road to re-invention is more difficult now, he said, because "we will argue about everything - the cost, the details, the letter of every law."

"I'm not sure how we'll reach that better place beyond the horizon, but I know we'll get there," Obama said. "We do big things."

The president's speech, which ran just over an hour, was largely devoted to proposals — some very specific — to bolster the nation's fragile economic recovery, reign in debt and compete internationally. But he shaded it with a moderate tone that appeared to be an effort to position him as an in-the-middle voice in a divided city.

Early in the speech, he invoked the recent massacre in Tucson, which left six dead and Arizona Rep. Gabrielle Giffords critically wounded. Members of Congress wore lapel ribbons in her honor; a seat was left empty for her.

"What comes of this moment is up to us," Obama said, noting that the tragedy prompted a national reflection on the tone of political discourse, and a symbolic move by some Congress members to sit with those of the opposite party during the speech.

"What comes of this moment will be determined not by whether we can sit together tonight, whether we can work together tomorrow."

After lauding the military for opening its doors to gay service members, he followed with a call for colleges and universities to welcome military recruiters on campus. After saying he's ordered up a review of government regulations, he said that, of course, he'd "not hesitate to create of enforce commonsense safeguards to protect the American people."

And though he said that it was time to "move on" from re-litigating the 2010 health care legislation, he said he's open to the GOP's push for medical malpractice reform.

The GOP Response

The nation faces a crushing burden of debt and is on course for an economic disaster without dramatic action to wrestle the budget deficit under control, House Budget Committee Chairman Paul Ryan said Tuesday in the Republican response to President Obama's State of the Union address.

And such spending cuts must start immediately as the price of getting GOP conservatives to cast a painful vote to increase the government's ability to borrow to pay its bills this spring, Ryan said.

"Our nation is approaching a tipping point. We are at a moment, where if government's growth is left unchecked and unchallenged, America's best century will be considered our past century," Ryan said in televised remarks.

In an unusual move, Tea Party favorite Michele Bachmann (R-MN) followed Ryan's response with high-profile speech of her own. It was originally aimed just at Tea Party activists but was also carried live by CNN.

"Last November you went to the polls and you voted out big-spending politicians and you put in their place great men and women with a commitment to follow our Constitution and cut the size of government," Bachmann said. "I believe that we are in the early days of a history-making turn in America."

— The Associated Press (Read more)

Feeling Their Pain

The president took pains early in his speech to feel the pain of Americans for whom the world of work and financial security, once assured, has been turned on its head with the advance of technology, outsourcing and other changes in the economy.

Though the president said the nation is "poised for progress," he acknowledged that for many Americans, once able to live comfortably with a factory job and no college degree, the "rules have changed."

"That world has changed, and for many, the change has been painful," he said, recalling the frustrations of "proud men and women who feel like the rules have been changed in the middle of the game."

He provided no answer for the Americans left behind by the global economy — just a presidential acknowledgement that the "competition for jobs is real." And an exhortation to "out-innovate, out-education, and out-build the rest of the world."

Corralling The Debt

Obama called for a $78 billion cut in defense spending, and a five-year freeze on certain domestic programs. He threatened to veto any bill containing earmarks – making common cause with Republicans. He proposed eliminating "billions" in taxpayer subsidies to oil companies, and said that there should be no permanent tax cuts for wealthy Americans.

He angered members of his own party when during Congress's lame duck session in December he broke a campaign promise by cutting a deal with Republicans to extend for two years Bush-era tax cuts for the wealthy.

And he said the decision-makers need to take a tough look at cutting the costs of expensive entitlement programs like Medicare and Medicaid, and finding a "bipartisan solution to strengthen Social Security for future generations."

Obama also called for rewriting the loophole-laden tax code, reserving some of his toughest language for lobbyists, whom he accused of engineering the nation's tax system to enrich a few. He also pushed for a fresh look at recommendations made late last year by his bipartisan debt commission.

"Over the years, a parade of lobbyists has rigged the tax code to benefit particular companies and industries," he said. "But all the rest of us are hit with one of the highest corporate tax rates in the world. It makes no sense and it has to change."

But in a shot at Republicans who have been calling for more and deeper cuts, the president warned that the budget ax needs to be wielded carefully — and not on the backs of the most vulnerable.

"Let's make sure what were cutting is really excess weight," he said. "Cutting the deficit by gutting our investments in innovation and education is like lightening an overloaded airplane by removing its engine. It may feel like you're flying high at first, but it won't take long before you'll feel the impact."

Familiar Themes

The president hit themes he's been trying out in recent weeks, characterizing his plan as one that stresses innovation, responsibility, education, rebuilding and reform. He called for an increase in investment in research and development and restated a commitment to doubling exports by 2014.

Obama used the tax cut extension deal that the two parties struck during December's lame duck session to segue into his vision for the economic future. The president has said before that U.S. corporations have been sitting on a lot of cash, and, his advisers said earlier Tuesday, the president "wants to get all that cash off the sidelines and into the economy."

In the official Republican response to the president's speech, Wisconsin Rep. Paul Ryan, chairman of the House Budget Committee faulted the previous Democratic-controlled Congress for failing to "pass or even propose a budget" last year.

"We owe you a better choice and a different vision," he said, pledging that the new GOP House majority would ensure that the "spending spree" is over. He pledged to draft a budget that will ease Americans' "justified" skepticism in both political parties.

"Our nation is approaching a tipping point," said Ryan, who had some GOP post-speech competition from fellow Republican Rep. Michele Bachmann of Minnesota, chair of the House Tea Party caucus.

"Just the creation of this nation itself was a miracle," Bachman said in a separate response. "Who can say that we won't see a miracle again? The perilous battle that was fought during World War II in the Pacific at Iwo Jima was a battle against all odds, and yet this picture immortalizes the victory of young GIs over the incursion against the Japanese. These six young men raising the flag came to symbolize all of America coming together to beat back a totalitarian aggressor.

"Our current debt crisis we face today is different, but we still need all of us to pull together. But we can do this. That's our hope. We will push forward. We will proclaim liberty throughout the land. And we will do so because we, the people, will never give up on this great nation."

Health Care: 'Let's Fix What Needs Fixing And Move Forward'

Obama moved quickly through the issue that spurred the most rancorous political discourse on Capitol Hill since his 2008 inauguration: health care legislation.

He signaled an openness to some revisions of the law, saying he is the first to say that "anything can be improved," but warned against "re-fighting the battles of the last two years."

"Let's fix what needs fixing and move forward," Obama said.

Democrats have claimed that support for repeal of the 2010 health care legislations has been consistently overstated by Republicans. And though the bill remains unpopular, they may be correct.

A new Kaiser Family Foundation/Harvard School of Public Health survey released Tuesday found that 28 percent of those questioned actually want the 2010 law expanded, compared with 20 percent who want it repealed and replaced with nothing.

Additionally, 19 percent said to leave the legislation alone, and 23 percent told surveyors that they would like the bill repealed, but replaced with a Republican plan.

And Obama may have a good reason for giving short shift to Republican repeal efforts: While the House passed repeal last week, the legislation will either die in the Democratic-controlled Senate, or courtesy of the president's veto pen.

'Bigger Than Party, And Bigger Than Politics'

The president made brief mention of the progress in withdrawing troops from Iraq, and taking the fight to the Taliban in Afghanistan. He reiterated his plan to begin bringing troops home from Afghanistan this summer, without specifying how many.

He lauded congressional approval in December of the nuclear weapons reduction treaty, and said the administration is "shaping a world that favors peace and prosperity."

Immigration reform was also given a passing note by the president when he spoke of his education initiatives. Another nod to the political realities in Washington, where the odds that Congress will take up an immigration overhaul bill are long.

His focus remained on jobs, progress made in the past year, and on a call for cooperation.

"At stake right now is not who wins the next election – after all, we just had an election," Obama said. "At stake is whether new jobs and industries take root in this country, or somewhere else."

"It's whether the hard work and industry of our people is rewarded. It's whether we sustain the leadership that has made America not just a place on a map, but a light to the world," Obama said.

During his State of the Union address last year, Obama called for the nation to "start anew," and acknowledged then a deepening cynicism Americans were feeling toward their government.

His speech Tuesday night added a new urgency, prodding Americans to recognize the fierce international economic competition they and their children and grandchildren face.

But in doing so, he attempted the delicate balance of not only appealing to the can-do spirit the nation has always prided itself on, but also the role that government can play in answering the global call of competition.

And that is likely to be form the crux of the economic debate that will continue apace on Capitol Hill, and in the White House.

"Our destiny," Obama said Tuesday night, "remains our choice."