"I have never been more hopeful about America's future than I am tonight," said Pres. Obama.
He started with hope but quickly acknowledged the hardship many Americans face.
"Some are frustrated; some are angry. They don't understand why it seems like bad behavior on Wall Street is rewarded but hard work on Main Street isn't; or why Washington has been unable or unwilling to solve any of our problems," said Obama.
President Obama told members of Congress two million people are working who would be unemployed right now, if not for the stimulus bill.
To generate more jobs, the president wants to turn over $30 billion in government loans, paid back by big banks, to community banks to make small business loans. For students, he proposes a $10,000 tax credit to help offset the cost of 4 years of college. To reign in spending, Obama wants to freeze some federal spending for the next three years.
The president devoted just a sliver of his State of the Union for his biggest priority of the last year: health care reform. So far, it has proven to be his biggest failure.
"If anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses, let me know," said Obama.
That plea was an acknowledgement that Democrats missed the chance to pass health care while they had near total control of Congress.
Obama also acknowledged he has not fulfilled his promise of bringing change to the partisan rancor on Capitol Hill.
"No I will not give up on trying to change the tone of our politics," said Obama.
The Republican response to the president's speech focused on some of the same issues: jobs, spending and education. Virginia governor Bob McDonnell said policies have to be enacted to help America better compete with the rest of the world.