Defiant Obama challenges Congress on sticky issues
Washington (CNN) -- President Barack Obama launches a three-day swing through key election states Wednesday after declaring in what could be his final State of the Union address that the nation was strengthening but must confront the defining issue of preserving the American dream.

In the speech Tuesday night to a joint sitting of Congress, Obama offered both his administration's priorities for the coming year and his campaign messaging for his re-election bid in November.

He defended a long list of his trademark policies -- tax increases on the wealthy, Wall Street reform, health care reform, government stimulus spending -- to applause from fellow Democrats while also offering proposals of interest to Republicans, such as corporate tax breaks and expanded oil and gas development.

Declaring "the state of our union is getting stronger," Obama said America had come too far in its still sluggish recover from economic recession "to turn back now."

With unemployment still above 8% and economic uncertainty lingering, Obama framed the challenges facing the country as a choice between opportunity for some or giving everyone a chance to prosper.

"The defining issue of our time is how to keep that promise alive," the president said.

"No challenge is more urgent. No debate is more important. 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."

He continued by saying, "What's at stake aren't Democratic values or Republican values, but American values, and we have to reclaim them."

The Republican response chided Obama for not addressing the nation's $15 trillion debt more forcefully, presenting a stark contrast in policy proposals and outlook to the president's more optimistic assessment of what has been accomplished and what is needed.

"It was irresponsible for him not to recognize the dire circumstances our country is in because of our debt," conservative Sen. Jim DeMint, R-South Carolina said. "He spent his speech making some more promises from government."

CNN Senior Political Analyst David Gergen described it as a "politically shrewd speech" likely to satisfy Obama's Democratic base while winning over some independents.

The annual evening of political pageantry, with senators and representatives joining Cabinet members, Supreme Court justices, military leaders and others in the packed House chamber, included a poignant touch with Democratic Rep. Gabrielle Giffords in attendance the night before she will resign due to her brain injury from last year's shooting attack in her native Arizona.

A champion of bipartisan politics, the still unsteady Giffords repeatedly was helped in rising to applaud Obama's speech by her Republican colleague from Arizona, Rep. Jeff Flake.

"It was the least I could do," Flake, a staunch conservative and frequent critic of the president, said. Asked if fellow Republicans thought he stood up so often to support what Obama was saying, Flake said in reference to Giffords: "I think most people would understand I support my colleague and friend."

Obama began and ended the 65-minute speech by praising U.S. troops for unity and teamwork that can serve as a model for facing the country's problems.

He called for lowering corporate taxes and providing incentives for U.S. manufacturers to bring overseas jobs back to America, while ending tax breaks for businesses that continue to outsource. At the same time, Obama said, every multinational company should pay a basic minimum tax, while giving American manufacturers a tax cut.

"It's time to stop rewarding businesses that ship jobs overseas, and start rewarding companies that create jobs right here in America," Obama said, adding a challenge to Congress he repeated throughout the night to send him a bill that he pledged to sign "right away."

He also challenged Congress to act on comprehensive immigration reform, a major election-year issue for the important Hispanic-American vote.