WASHINGTON – President Barack Obama used an election-year State of the Union address Tuesday night to frame the national debate not as a referendum on his performance but as a pivotal decision on how to save the American dream.

He boasted that the nation's economy has improved, albeit slowly, from the depths of the Great Recession. "The state of our union is getting stronger," he said.

But he said the middle class has been losing ground for decades, and he urged a new agenda of taxes and government spending on infrastructure to tilt the playing field away from the rich and powerful and more toward the rest of the citizenry.

Once, he said, Americans believed "the basic American promise that if you worked hard, you could do well enough to raise a family, own a home, send your kids to college, and put a little away for retirement. The defining issue of our time is how to keep that promise alive."

"No challenge is more urgent. No debate is more important," he said. "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. 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."

The speech fleshed out a broad vision Obama laid out in December in a speech in Osawatomie, Kan., one modeled after a 1910 speech that Theodore Roosevelt gave in the same town laying out themes for what would become the Progressive Era.

Among his proposals: a 30 percent minimum tax on people who make more than $1 million a year; a minimum tax on companies that ship jobs overseas coupled with tax cuts for those that keep factory jobs at home; and a $200 billion, six-year plan to build roads, bridges and railways with money saved from bringing U.S. troops home from Afghanistan and Iraq.

Obama opened his speech declaring victory in bringing U.S. troops home from Iraq, eliminating Osama bin Laden and starting the withdrawal from Afghanistan. That enables the country, he said, to "think about the America within our reach."

Under the broad theme of helping build a fairer economy, Obama laid out proposals in four categories: helping restore U.S. manufacturing; improving U.S. energy independence; teaching workers new skills for a changing economy; and tax increases he called "a renewal of American values."

He proposed that people making more than $1 million a year pay a minimum tax of 30 percent, putting a precise number to the idea he proposed last year. The Republicans vying for his job have proposed cutting taxes for the wealthy, arguing they are the ones who create jobs.

Obama also vowed more oversight of Wall Street, saying he had directed Attorney General Eric Holder to create a financial crimes unit to investigate and prosecute large-scale financial fraud.

He boasted that manufacturing – for a century the stepping stone of upward mobility – is adding jobs again for the first time in more than a decade.

To help the working class, he proposed partnerships with community colleges and businesses to train and place 2 million workers, and overhauling the unemployment compensation program that provides checks to laid-off workers, linking the aid to training.

Obama looked out on a Congress where Republicans control the House of Representatives and have ruled out most of his proposals, particularly tax increases for the wealthy.

"As long as I'm president, I will work with anyone in this chamber," Obama said. "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.

"We will not go back to an economy weakened by outsourcing, bad debt and phony financial profits," he added.

Gov. Mitch Daniels of Indiana, giving the official Republican response, rejected the criticism of his party as obstructionist.

"It's not fair and it's not true for the president to attack Republicans in Congress as obstacles on these questions," he said. "They and they alone have passed bills to reduce borrowing, reform entitlements and encourage new job creation, only to be shot down nearly time and again by the president and his Democrat Senate allies."

Daniels lamented criticism of the wealthy as not paying their "fair share," calling it needlessly divisive. "No feature of the Obama presidency has been sadder than its constant efforts to divide us, to curry favor with some Americans by castigating others," said Daniels.

"As in previous moments of national danger, we Americans are all in the same boat. If we drift, quarreling and paralyzed, over a Niagara of debt, we will all suffer, regardless of income, race, gender or other category."

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