US President Barack Obama demanded large tax hikes on millionaires to finance a fair economy for all, sketching a populist vision to persuade crisis-weary voters he merits a second White House term.
"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," Obama said in his State of the Union address 10 months before he seeks reelection.
"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 said, playing on rising anger over inequality in post-recession America.
In the annual ritual, Obama's best chance for months to directly reach millions of voters, he mostly surveyed domestic issues as he fires up his campaign machine.
But he did touch on several simmering foreign crises -- including the deepening nuclear showdown with Iran, which has exposed him to searing charges of weakness from Republican White House hopefuls.
"Let there be no doubt. America is determined to prevent Iran from getting a nuclear weapon, and I will take no options off the table to achieve that goal," Obama said, earning a standing ovation in the House of Representatives.
"But a peaceful resolution of this issue is still possible, and far better, and if Iran changes course, and meets its obligations, it can rejoin the community of nations."
The president, breathing defiance, said the "defining issue" of our time was how to safeguard the basic "American promise" that hard work could provide a decent lifestyle.
And he proposed using the power of government to close the gap between the super rich and the middle classes, laying down a gauntlet to Republicans who charge he stifled the recovery with burdensome regulation.
Obama mounted a staunch defense of his efforts to revive the economy, which will form the central clash of the presidential election.
He touted the creation of more than three million jobs in less than two years, said he had saved the US auto industry and predicted American manufacturing, the engine of the economy, would rise again.
"The state of our union is getting stronger, and we've come too far to turn back now," Obama said, delivering a sharp warning to Republicans expected to block almost all of the jobs and recovery plans contained in his speech.
Staring at lawmakers packed onto brown padded seats in the House, he warned he would fight obstruction with action.
"I will oppose any effort to return to the very same policies that brought on this economic crisis in the first place," he said to loud cheers from Democrats.
Obama hailed the killing of Osama bin Laden last year by a US special forces team in a daring raid into Pakistan and his promise kept to end the Iraq war as election year proof of his credentials as commander-in-chief.
He held up the heroism of the Navy SEAL team that snuffed out the Al-Qaeda leader as a metaphor for the way feuding US politicians should join in the name of national renewal.
"The mission only succeeded because every member of that unit trusted each other -- because you can't charge up those stairs, into darkness and danger, unless you know there is someone behind you, watching your back," he said.
"So it is with America."
Among job creation and economic measures, Obama demanded millionaires pay at least 30 percent tax rates, tapping into public anger at low rates paid by the rich, including his possible Republican election foe Mitt Romney.
Romney on Tuesday reported income of $21.7 million in 2010 from investments and an estimated $20.9 million in 2011 -- and in 2010 paid just over $3 million in taxes, or 13.9 percent.
The president also pledged to keep up pressure on China over intellectual property piracy and promised to new measures to combat fraud in the finance industry and the mortgage sector.
Republicans quickly savaged the speech.
In a new advertisement, Romney compared the hope whipped up by the president in 2008 to his actual job performance.
"Three years ago, we measured candidate Obama by his hopeful promises and his slogans. Today President Obama has amassed an actual record of debt, decline and disappointment," Romney said.
Romney foe Newt Gingrich complained Obama argued "that his big government is built to last and should be paid for with higher taxes.
"But bigger government and higher taxes will not lead to jobs and growth."
And Mitch Daniels, the Indiana governor chosen to give the official Republican response to Obama, accused the president of adopting divisive election year tactics.
"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," Daniels said.
Looking abroad, Obama hailed the demise of Libya's Moamer Kadhafi -- implicitly rebutting Republican criticisms that he "led from behind" in the crisis -- and warned Syria's Bashar al-Assad his regime's days were numbered.
And he said anyone who said American power was in decline did not know what they were talking about, adding: "America remains the one indispensable nation in world affairs."