|Obama pledged to invest in green energy and stop subsidising 'yesterday's energy' [Reuters]
The US president has been focusing on jobs and the economy as he addressed the public in his annual State of the Union speech.
In his first such address since his Democrat party lost the majority in Congress, Barack Obama said that what matters is creating jobs, not who wins the next election.
"At stake right now is not who wins the next election - after all, we just had an election. At stake is whether new jobs and industries take root in this country, or somewhere else," he said on Tuesday.
He pledged investments in green energy and to stop subsidising "yesterday's energy".
"With more research and incentives, we can break our dependence on oil with biofuels, and become the first country to have one million electric vehicles on the road by 2015," Obama said.
"I don't know if you've noticed, but they're doing just fine on their own. So instead of subsidising yesterday's energy, let's invest in tomorrow's."
Obama also encouraged innovation, saying no one can foresee where the next big industry will be.
"What America does better than anyone is to spark the imagination of our people ... In America, innovation ... is how we make our living," he said.
Speaking to Al Jazeera, Steve Clemons, of the New America Foundation, said Obama was highlighting that while the US was big and powerful "we are underperforming as a nation".
"We are well-branded, but China and India are the Googles and Facebooks of countries," he said.
"These are the countries that have moved the needle up in terms of the quality of their intellectual capital, and we are in competition with them."
Obama also vowed to invest in infrastructure, including giving 80 per cent of residents access to high-speed rail within 25 years.
He also called for lower corporate taxes, to remove an "unnecessary burden" on companies while making it more difficult to escape paying taxes.
"I'm asking Democrats and Republicans to simplify the system. Get rid of the loopholes. Level the
playing field. And use the savings to lower the corporate tax rate for the first time in 25 years - without adding to our deficit."
Partial spending freeze
Addressing the country's huge budget deficit, Obama proposed a five-year freeze in non-security discretionary spending.
"I am proposing that starting this year, we freeze annual domestic spending for the next five years. This would reduce the deficit by more than $400bn over the next decade, and will bring discretionary spending to the lowest share of our economy since Dwight Eisenhower was president," he said.
Obama has previously proposed a three-year freeze on such spending, starting with the 2011 budget.
The freeze would impact spending negotiated by the president and congress each year, and not include mandatory programmes the government is legally bound to finance, such as social security retirement payments.
Discretionary spending, excluding money for security, accounts for just 13 per cent of the $3.7 trillion federal budget.
On foreign policy, Obama repeated his plan to begin bringing US troops home from Afghanistan in July.
"There will be tough fighting ahead, and the Afghan government will need to deliver better governance. But we are strengthening the capacity of the Afghan people and building an enduring partnership with them," he said.
For Al-Qaeda in the Arabian Peninsula and elsewhere, he said the message was clear: "We will not relent, we will not waver, and we will defeat you".
Sue Turton, Al Jazeera's Afghanistan correspondent, said Obama called the conflict "America's longest war, yet spent 30 seconds on it [in his speech]".
Pledges of new investment to spur job growth are likely to anger the Republican opposition, which has been calling for drastic cuts in government spending.
Setting the stage for the Republican arguments, the House voted on Tuesday to approve a non-binding resolution calling for a return to 2008 spending levels.
Nearly 20 Democrats sided with Republicans as legislators voted 256-165 in favour of the measure.
There were two Republican responses to Obama's address - an official one by Paul Ryan, the House budget chief, and one by Michele Bachmann of the "Tea Party".
However, public reaction to Obama's speech was decidedly mixed.
Sameyha Mirza, an entrepreneur, told Al Jazeera: "It [the president's speech] was extremely optimistic and inspirational, the key word was 'reinvent'."
However, Johnathan Will-Banks, from the University of Southern California, said: "There was a lot of talking without actually saying much. There was no single policy proposal."
Rosalind Jordan, Al Jazeera's Washington correspondent, said although the president's remarks on foreign policy were rather weak, he did issue a strong endorsement of what the people of Tunisia have been doing in the past five weeks or so.
"There was a key ommission, however, we heard about Iraq, we heard about Afghanistan, we heard about Tunisia but we did not hear about what is happpening tonight in Egypt with thousands of protestors in the streets of Cairo and in other cities of Egypt," she said.
"It may well be because Egypt is an ally of the US, so the president did not want to use this venue to actually wade into something that is still developing."
John Nichols, a political writer for The Nation magazine, told Al Jazeera it was "really the start of the president's re-election campaign 2012.
"And failure to mention Cairo was the most disappointing part of the speech".
Marwan Bashara, Al Jazeera's senior political analyst, said: "Obama is more comfortable being a manager than a commander; he is the bridger-in-chief.
"And he feels very comfortable working between the Republicans and the Democrats, bridging America's past and the future, bridging America's policy abroad and its domestic interests."
Nichols said Obama was "positioning himself as the bridger-in-chief because, unfortunately, with a divided government, not a lot is going to be achieved.
"This was more of an international speech than American presidents usually give. It was sober, mature, more instructive and with not a lot of applause lines."