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Obama Issues the Challenge

President Barack Obama spent the first two years of his term promising to deliver change. In his second State of the Union address Tuesday night, he changed tacks: telling the nation that it is at a crossroads and that all Americans need to take part in its transition or be left behind.

In a speech that echoed the voices of Martin Luther King Jr. and President John F. Kennedy, who led the nation through another period of economic and emotional transition, Obama hammered the message that the American dream is still within reach but only if people can meet the demands of a new age.

“The future is ours to win. But to get there, we can’t just stand still,” he said. “We know what it takes to compete for the jobs and industries of our time. We need to out-innovate, out-educate and out-build the rest of the world. We have to make America the best place on Earth to do business.”

The president began his address by congratulating the new GOP House majority and acknowledging the victims of the Arizona shootings, noting the chair left empty in the chamber by Rep. Gabrielle Giffords (D-Ariz.), who is still recovering from a gunshot wound to the head. Obama’s speech was gentler in tone than his first State of the Union a year ago, and the atmospherics of the chamber were also friendlier: Dozens of Members of different parties broke tradition and sat side-by-side, rather than sitting separately by party.

“What comes of this moment is up to us. What comes of this moment will be determined not by whether we can sit together tonight, but whether we can work together tomorrow,” Obama said.

“I believe we can. I believe we must. That’s what the people who sent us here expect of us.”

Obama, speaking for about an hour, used much of his address laying out his vision for moving the country forward based on five themes: innovation, education, building, reform and responsibility. And at the heart of his road map is a plan to put the nation on a strict fiscal diet while also making targeted investments in clean energy and infrastructure to boost the economy. He also issued one veto threat: Obama said he would reject any bill that came to his desk containing earmarks.

One of the president’s most significant proposals is a five-year freeze on annual domestic spending. The move would reduce the deficit by more than $400 billion over 10 years, making it the lowest proportion of the gross domestic product since Dwight Eisenhower was president. Republicans have made the debt a centerpiece of their agenda over the next two years and have called for major spending cuts to get there.

“A critical step in winning the future is to make sure we aren’t buried under a mountain of debt,” Obama said. “We have to confront the fact that our government spends more than it takes in. That is not sustainable.”

At the same time, he called for increasing funding for clean energy technology to $8 billion a year, ending the $4 billion per year in tax subsidies to oil and gas producers, and allocating more funds for advancing his goal of putting 1 million advanced technology vehicles on the roads by 2015.

“This is our generation’s Sputnik moment,” Obama said. More investments in clean energy technology “will strengthen our security, protect our planet, and create countless new jobs for our people.”

On education, the president called for major reforms to No Child Left Behind, helping to prepare an additional 100,000 science, technology, engineering and math teachers, and making the $10,000 American Opportunity Tax Credit permanent.

Obama also urged major infrastructure investments. He said his budget will include upfront funds for creating jobs to repair bridges and roads, a “significant down payment” on a national rail network and a new National Wireless Initiative aimed at providing 98 percent of Americans access to high-speed Internet.

The president mapped out several initiatives to try to appeal to Republicans. He called for “a fundamental reform” of the corporate tax system, passage of trade agreements including the recently completed U.S.-Korea Free Trade Agreement, further efforts to reduce the costs of health care and the first major reorganization of the government “in half a century” aimed at making America more competitive.

Obama referenced “jobs” 25 times and the word “dream” 11 times as he described an America built by ordinary people who dared to dream. One of those people, he said, is Speaker John Boehner (R-Ohio).

That vision of America “is why someone who began by sweeping the floors of his father’s Cincinnati bar can preside as Speaker of the House in the greatest nation on earth,” he said.

House Budget Chairman Paul Ryan (Wis.), delivering the official GOP response, echoed Obama’s call for a more civil discourse but also criticized the administration for adding to the deficit and advocating economic policies that have not significantly lowered unemployment. Looking ahead to Congress’ budget debate, he vowed that the GOP alternative will “show you how we intend to do things differently” and said House Republicans will demand further spending cuts in the lead-up to the debate over the debt limit.

“Our forthcoming budget is our obligation to you: to show you how we intend to do things differently, how we will cut spending to get the debt down, help create jobs and prosperity, and reform government programs,” he said during the taping in the Budget Committee room.

Ryan added that Americans are right to be skeptical of both parties, “especially when it comes to spending,” and vowed to press for GOP solutions that haven’t advanced in the past two years.

“We owe you a better choice and a different vision,” he said.

Unlike most State of the Union addresses in which the president declares the state of the country at the outset, Obama waited until the end. He said America will always endure because it is a place where “we do big things.”

“Our destiny remains our choice. And tonight, more than two centuries later, it is because of our people that our future is hopeful, our journey goes forward, and the state of our union is strong,” he said.

Two issues noticeably absent from the address were gun control and Middle East peace talks. Gun control advocates were hoping Obama might use the address to signal support for banning high-capacity magazines after the Tucson shooting rampage. And the silence on the Middle East peace talks comes months after the administration tried and failed to make progress on the issue.

White House Press Secretary Robert Gibbs said the omission “doesn’t mean the president isn’t committed to Middle East peace” and is more reflective of the address focusing on broad themes.

“There will certainly be things that will take up a lot of time of people here in the White House that might not be mentioned” in the speech, Gibbs told reporters during a Tuesday briefing.

Jessica Brady contributed to this report.