US President Barack Obama has vowed to build a 'top to bottom' economy in which the rich pay a fair share and pledged new efforts on clean energy, in his key State of the Union address.
"We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by," Obama said in his State of the Union address 10 months before seeking a second term.
"Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules," he said.
The president, speaking firmly and at times in a defiant tone, said the "defining issue" of our time was how to safeguard the basic "American promise" that hard work could lead to a decent lifestyle.
He mounted a staunch defense of his efforts to revive the economy, which will form the central clash of the presidential election, as Republicans argue he delayed the recovery by wasting stimulus funds and piling up debt.
He said he had created more than three million jobs in less than two years, saved the US auto industry and said American manufacturing, the engine of the economy, was rising again.
"The state of our union is getting stronger, and we've come too far to turn back now," Obama said, delivering a sharp warning to Republicans expected to block almost all of the jobs and recovery plans contained in his speech.
"As long as I'm president, I will work with anyone in this chamber to build on this momentum," said Obama, staring into the ranks of lawmakers packed into the House of Representatives for the showpiece speech.
"But I intend to fight obstruction with action, and I will oppose any effort to return to the very same policies that brought on this economic crisis in the first place," he said to loud cheers from Democrats.
PEACE WITH IRAN 'STILL POSSIBLE'
Obama stayed mostly on domestic issues, as expected in an election year, but did refer to several foreign crises -- and touched on the darkening clouds of the nuclear showdown with Iran.
"Let there be no doubt. America is determined to prevent Iran from getting a nuclear weapon, and I will take no options off the table to achieve that goal," he said.
"But a peaceful resolution of this issue is still possible, and far better, and if Iran changes course, and meets its obligations, it can rejoin the community of nations."
END OF IRAQ WAR HAILED
Obama hailed the killing of Osama bin Laden last year by a US special forces team in a daring raid into Pakistan and his promise kept to end the Iraq war as election year proof of his credentials as commander-in-chief.
"For the first time, there are no Americans fighting in Iraq. For the first time, in two decades, Osama bin Laden is not a threat to this country," the president said, in his speech to US lawmakers which effectively launches his campaign for re-election in November.
Praising "this generation of heroes" which has "made the United States safer and more respected around the world," Obama won his first standing ovation of the night from some of the gathered lawmakers.
"Most of Al-Qaeda's top lieutenants have been defeated. The Taliban's momentum has been broken, and some troops in Afghanistan have begun to come home," he said.
Addressing rows of military men in uniform from his top joint chiefs of staff, Obama praised the achievements as "a testament to the courage, selflessness, and teamwork of America's Armed Forces."
"At a time when too many of our institutions have let us down, they exceed all expectations. They're not consumed with personal ambition. They don't obsess over their differences. They focus on the mission at hand. They work together."
OBAMA DEMANDS MILLIONAIRES TO PAY 30% TAX
Obama demanded millionaires pay at least 30 percent tax, tapping into public anger at low rates paid by many millionaires, including his possible Republican general election rival Mitt Romney.
"We need to change our tax code so that people like me, and an awful lot of Members of Congress, pay our fair share of taxes," Obama said in remarks prepared for the joint session of Congress.
"If you make more than $1 million a year, you should not pay less than 30 percent in taxes."
Pledging no tax increases for those earning under $250,000 a year, Obama doubled-down on an election-year gambit which casts him as a champion of America's middle class.
"If you make under $250,000 a year, like 98 percent of American families, your taxes shouldn't go up. You're the ones struggling with rising costs and stagnant wages. You're the ones who need relief."
Obama also proposed eliminating housing, healthcare, retirement and childcare tax breaks for millionaires.
"If you're earning a million dollars a year, you shouldn't get special tax subsidies or deductions," he said.
The changes could spell a vastly different tax bill for up to four million Americans.
According to the Tax Policy Center, nearly 90 percent of those earning over $200,000 pay an effective tax rate of 15 to 30 percent.
TRADE UNIT ANNOUNCED
"Tonight, I'm announcing the creation of a Trade Enforcement Unit that will be charged with investigating unfair trade practices in countries like China," Obama told Congress.
"I will go anywhere in the world to open new markets for American products," he said.
"And I will not stand by when our competitors don't play by the rules. We've brought trade cases against China at nearly twice the rate as the last administration -- and it's made a difference."
"It's not right when another country lets our movies, music, and software be pirated. It's not fair when foreign manufacturers have a leg up on ours only because they're heavily subsidized."
END TO DODGY MORTGAGES
Obama announced the creation of a special unit to investigate dodgy mortgage lending, as he stepped up the pressure on the country's big banks.
"Tonight, I am asking my Attorney General to create a special unit of federal prosecutors and leading state attorneys general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis," Obama said.
"This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans."
His comments come amid a stream of legal complaints against big banks over foreclosures and unfair lending practices, and amid persistent rumors that a grand bargain could see banks agree to pay out $25 billion to end legal proceedings.
The cash would be used to help homeowners who owe more than their home is now worth, or those that had their homes wrongfully repossessed.
BOOST TO CLEAN ENERGY
The US President pledged new government incentives to boost clean energy, warning that the United States risked being left behind in the new industry by China and Germany.
But in a nod to political realities, Obama acknowledged that the deeply divided Congress would not approve comprehensive legislation to fight climate change.
Obama urged Congress instead to renew tax credits to support clean energy and repeated calls for an end to subsidies for oil companies, which he said were already profitable.
Obama, whose administration has been expanding the areas of potential use for solar, wind and other green technologies, set a goal of powering three million homes through renewable energy on public lands.
"The differences in this chamber may be too deep right now to pass a comprehensive plan to fight climate change. But there's no reason why Congress shouldn't at least set a clean energy standard that creates a market for innovation," Obama said, according to his prepared remarks.
"I will not cede the wind or solar or battery industry to China or Germany because we refuse to make the same commitment here. We have subsidized oil companies for a century. That's long enough," Obama said.
Legislation backed by Obama to fight climate change died in the US Senate in 2010 amid staunch opposition from the rival Republican Party, many of whose members question scientists' view that carbon emissions are behind rising temperatures.
Republicans have hammered Obama over a $535 million government loan for Solyndra, a now bankrupt solar firm, and his administration's rejection of the controversial Keystone XL pipeline project from Canada.
ARAB SPRING HAILED
The President hailed the "incredible transformation" brought by the Arab Spring and promised that America would stand up for democracy against "violence and intimidation."
"How this incredible transformation will end remains uncertain. But we have a huge stake in the outcome," Obama said.
"We will support policies that lead to strong and stable democracies and open markets, because tyranny is no match for liberty."
He hailed the demise of Libya's Muammar Gaddafi and warned Syria's Bashar al-Assad his regime's days were numbered Tuesday as he vowed enduring US support for the ideals of the Arab Spring.
"As the tide of war recedes, a wave of change has washed across the Middle East and North Africa, from Tunis to Cairo; from Sanaa to Tripoli," Obama said in his annual State of the Union address in Congress.
"A year ago, Gaddafi was one of the world's longest-serving dictators -- a murderer with American blood on his hands. Today, he is gone.
"And in Syria, I have no doubt that the Assad regime will soon discover that the forces of change can't be reversed, and that human dignity can't be denied."
While noting it was unclear how events in the Middle East and North Africa would unfold, Obama said he would continue to "stand against violence and intimidation" and support democratic ideals.
"How this incredible transformation will end remains uncertain. But we have a huge stake in the outcome," he said.
"We will support policies that lead to strong and stable democracies and open markets, because tyranny is no match for liberty."
