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Obama On State Of The Union: Economic Revival Is 'Unfinished Task'

WASHINGTON (CBSNewYork/AP) - President Barack Obama said the national union is strong in the State of the Union Address Tuesday night, but he still has a raft of sticky-wicket problems to deal with at home and abroad.

As CBS 2's Marcia Kramer reported, despite a divided Congress and bipartisan bickering, President Obama has asked lawmakers to do a lot of heavy lifting this year. And it is unclear how successful he will be, but Obama said all his new proposals will be fully paid for.

"Nothing I'm proposing tonight should increase our deficit by a single dime," Obama said. "It is not a bigger government we need, but a smarter government that sets priorities and invests in broad-based growth."

But with unemployment persistently high and consumer confidence falling, he pressed a case for a significant government role in reigniting economic growth.

"The American people don't expect government to solve every problem; they don't expect those of us in this chamber to agree on every issue," he said. "But they do expect us to put the nation's interests before party. They do expect us to forge reasonable compromise where we can.''

"It is our unfinished task to restore the basic bargain that built this country -- the idea that if you work hard and meet your responsibilities, you can get ahead, no matter where you come from, what you look like, or who you love,'' Obama said, speaking to a joint session of Congress and a television audience of millions.

Obama said he wants to grow the economy and head off the painful across-the-board spending cuts set to go into effect March 1. He called for a mix of targeted budget cuts and some tax hikes, "by getting rid of tax loopholes and deductions for the well-off and the well-connected."

But even party loyalists such as Sen. Charles Schumer (D-N.Y.) think Americans – and especially Tri-State Area residents – have had enough with tax hikes.

"If the middle class continues to decline, we will not be the same country we have been for 200 years," Schumer said. "Here's the bottom line. The only kind of revenues we should raise are closing loopholes."

The president was uncompromising in a call for bringing down the deficit through a combination of tax increases and targeted spending cuts, though he has offered few specifics on either. He did reiterate his willingness to tackle entitlement changes, particularly on Medicare, though he has ruled out increasing the eligibility age for the popular benefit program for seniors.

Obama said it is economic growth that serves as his "North Star.'' He challenged a Congress often stalled by partisan bickering to focus on three key principles: attracting more jobs to the U.S., equipping Americans with the skills to compete for the positions and making sure hard work leads to a decent living.

"It is our generation's task, then, to reignite the true engine of America's economic growth -- a rising, thriving middle class,'' Obama said.

Seeking to increase wages for 15 million Americans, Obama called for raising the federal minimum wage from $7.25 to $9 by 2015. The minimum wage has been stagnant since 2007, and administration officials said the increase would strengthen purchasing power.

The president also wants Congress to approve automatic increases in the wage to keep pace with inflation. Republican presidential candidate Mitt Romney backed a similar proposal during last year's campaign.

In domestic policy issues, the president called for shrinking the deficit, tackling climate change, overhauling immigration laws, and enacting gun reform.

"Gabby Giffords deserves a vote. The families of Newtown deserve a vote. The families of Aurora (Colo.) deserve a vote," Obama said.

During the speech, First Lady Michelle Obama sat with the parents of Hadiya Pendleton, a Chicago teenager shot and killed just days after she performed at the president's inauguration.

Sen. Richard Blumenthal Talks Gun Violence and State of the Union

More than two dozen lawmakers invited gun violence victims and their families to attend the speech as their guests. Republican Sen. John McCain and Democratic Rep. Ron Barber, both of Arizona, attended with their former congressional colleague, Giffords, who was wounded in a 2011 attack.

Obama also renewed his calls for infrastructure spending, investments he sought repeatedly during his first term with little support from Republicans. He pressed lawmakers to approve a $50 billion "fix it first'' program that would address the most urgent infrastructure needs.

Education also figures in Obama's plans to boost American competitiveness in the global economy. Under his proposal, the federal government would help states provide pre-school for all 4-year-olds. Officials did not provide a cost for the pre-school programs but said the government would provide financial incentives to help states.

Obama also called on Congress to tackle the threat of climate change, another issue that eluded him in his first term. The president pledged to work with lawmakers to seek bipartisan solutions but said if Capitol Hill doesn't act, he'll order his Cabinet to seek steps he can take using his presidential powers.

In foreign policy, the president wants to bring home half the 66,000 troops in Afghanistan within a year. He wants to reduce the size of the nation's nuclear stockpile from 1,700 to 1,000 warheads.

He also chastised North Korea for detonating a nuclear bomb – its third – Monday night.

"Provocations of the sort we saw last night will only isolate them further, as we stand by our allies, strengthen our own missile defense, and lead the world in taking firm action in response to these threats," Obama said.

Among the other initiatives Obama is proposing:

• A $1 billion plan to create 15 ``manufacturing institutes'' that would bring together businesses, universities and the government. If Congress opposes the initiative, Obama plans to use his presidential powers to create three institutes on his own.

• Creation of an ``energy security trust'' that would use revenue from federal oil and gas leases to support development of clean energy technologies such as biofuels and natural gas

• Doubling of renewable energy in the U.S. from wind, solar and geothermal sources by 2020.

Tuesday night's address marked Obama's most expansive remarks on the economy since the November election. Since securing a second term, the president has focused more heavily on new domestic policy proposals, including immigration changes and preventing gun violence following the horrific shooting of schoolchildren in Newtown, Conn.

The president largely reiterated those proposals, but offered no new specifics. But on gun violence in particular, some of the atmospherics of the annual address were aimed at pressuring reluctant lawmakers to back Obama's calls for universal background checks for gun purchasers and bans on assault weapons and high-capacity ammunition magazines.

The Republican response was given by U.S. Sen. Marco Rubio (R-Fla.), who demanded that Obama "abandon his obsession with raising taxes."

"The tax increases and the deficit spending you propose will hurt middle class families. It will cost them their raises," Rubio said. "So, Mr. President, I don't oppose your plans because I want to protect the rich. I oppose your plan because I want to protect my neighbors."

The president intends to rally public support for his ambitious agenda with trips later this week to North Carolina, Georgia and Illinois. But he will still have to get Republicans to control the House to bite.

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(TM and © Copyright 2013 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2013 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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