In an hour-long address focused tightly on domestic issues, Obama also announced that he will bring home 34,000 American troops from Afghanistan over the next year, cutting thee U.S. force level there by almost half.

The U.S. mission in Afghanistan concludes at the end of 2014, and Obama intends to keep only a small force there for training and counter-terrorism beyond that date. “After a decade of grinding war," the president said, “our men and women in uniform are coming home."

The speech, interrupted repeatedly with raucous and sometimes strictly partisan applause, was Obama's fourth State of the Union address. He used the annual ritual to attempt to turn the page on a first term preoccupied with winding down two wars and working to repair a badly damaged economy.

“We have cleared away the rubble of crisis," he said, “and can say with renewed confidence that the state of our union is stronger."

Throughout the speech, however, was a warning that the nation's progress, which he repeatedly called “unfinished," is in peril unless Obama and Congress can work together on the economy's behalf.

“We gather here knowing that there are millions of Americans whose hard work and dedication have not yet been rewarded," he said. “It is our generation's task, then, to reignite the true engine of America's economic growth — a rising, thriving middle class."

Economic progress has been halting since he took office, and he spoke Tuesday with the looming threat to the economy of automatic spending cuts, known as sequestration, just a little over two weeks away.

Obama and Congressional leaders have been unable to reach agreement on how to avert the cuts, which the president warned Tuesday would fall hardest on those who can least afford them.

He called for “bipartisan, comprehensive tax reform," and emphasized that his proposals would not add to the $854 billion deficit, only re-allocate money already in the budget to finance them.

“But let's be clear: Deficit reduction alone is not an economic plan," Obama said. “A growing economy that creates good, middle-class jobs — that must be the North Star that guides our efforts."

Unlike his second inaugural address last month, when liberal social issues defined much of his message, Obama spoke directly Tuesday to a prime-time television audience about what he believes must be done to improve the economy and prepare the next generation of workers for the jobs it is creating.

He will take his message on the road over the next few days, visiting North Carolina, Georgia and Illinois to discuss various economic proposals.

The proposals range from spending $40 billion to upgrade bridges to starting a fund, known as the Energy Security Trust, responsible for researching ways for more American cars and trucks to run on cleaner fuels.

When Obama spoke Tuesday about immigration legislation, gun control and climate change — issues that rank high on his domestic agenda — he did so by connecting them directly to the American economy.

He called on Americans to cut in half the energy wasted by homes and businesses in the next two decades, something that would benefit the environment as well as the economy. Green jobs, he argued, will be the ones helping drive future employment growth.