A revitalized President Barack Obama bluntly said America must reinvent itself and unite to survive in a fast-changing global economy powered by rising giants like India and China.
Obama belted out a confident State of the Union address mixing straight talk with a patriotic call to action, as he rode a tide of improbable political momentum less than three months after a Republican mid-term election rout.
The president spoke to a television audience of millions from the House of Representatives, seeking to unleash a torrent of innovation to transform the economy after the most brutal meltdown in generations.
"The rules have changed. In a single generation, revolutions in technology have transformed the way we live, work and do business," Obama said, noting that rising powers like India and China were now highly competitive.
But he added Americans should not give up the fight.
"Yes, the world has changed. The competition for jobs is real. But this shouldn't discourage us. It should challenge us," he said, citing US pathfinders from the Wright Brothers and Thomas Edison to Google and Facebook.
"We need to out-innovate, out-educate, and out-build the rest of the world," Obama said, in a speech punctuated by multiple ovations which sought to consign two years of economic gloom to the past, as his 2012 reelection race stirs.
With its offer to redo corporate tax rates, the address also seemed another tack to the political center ground where US presidential races are won.
The speech was however sparse on policy nuts and bolts, and the idealistic call for unity appeared at odds with the ugly politics of Washington.
Obama announced a plan for a five-year freeze on non-security discretionary spending in a bid to tackle the 1.3 trillion dollar US deficit, but he warned Republican plans for huge tax cuts would thwart the recovery.
He said cutting the deficit by gutting investments in education was like "lightening an overloaded airplane by removing its engine."
Republicans rejected his prescriptions however.
"Unfortunately, instead of restoring the fundamentals of economic growth, he engaged in a stimulus spending spree that not only failed to deliver on its promise to create jobs, but also plunged us even deeper into debt," said Republican House Budget chief Paul Ryan.
"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."
Reflecting divisions among Republicans, despite their rise to power, Ryan's was not the only response by his party.
Congresswoman Michele Bachmann delivered an address specifically tailored to the ultra-conservative "Tea Party" grass roots movement, which has challenged the authority of establishment party leaders in Washington.
The speech came with Congress chastened by the Arizona shooting rampage targeting a lawmaker -- which sparked calls to quell explosive rhetoric.
In a powerful reminder of the tragedy, First Lady Michelle Obama sat next to the parents of a nine-year-old girl killed in the attack, and an aide who helped save congresswoman Gabrielle Giffords, in her box in the House chamber.
Dozens of lawmakers meanwhile ditched the usual partisan seating plan to sit side by side, in a nod to Obama's soaring call for political civility after the shooting. They wore black and white ribbons to honor Giffords.
Specifically, Obama called for a raft of measures to make America leaner, and more nimble in the global economy. His policy prescriptions included:
-- A plan to draw 80 percent of US electricity from clean energy by 2035
-- A "Race to the Top" school reform program to promote science and learning
-- A plan to give 98 percent of Americans high speed Wireless Internet
-- Repairs to "crumbling" US infrastructure and a plan for high-speed rail.
Obama also defended his health care reform program which House Republicans have already voted to repeal, and offered to work with them to make it better, though vowed not to return power to insurance giants.
He warned US politicians should ditch partisan sparring, saying that Americans faced a "Sputnik" moment -- similar to the time of 1950s national crisis when the Soviet Union launched the space race.
On foreign policy, Obama Tuesday renewed his vow to start withdrawing US troops from Afghanistan in July but warned of "tough fighting ahead."
He reiterated that America would defeat Al-Qaeda and noted his vow to bring all troops out of Iraq would become a reality later this year.
Obama also lauded tough sanctions against Iran's nuclear program and insisted North Korea keep its commitment to shelve its nuclear weapons.