Standing in front of a divided Congress, with bleak hope this election year for much of his legislative agenda, the president used Tuesday night's address to connect with voters.
"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 president said.
The president drew an election-year battle line with Republicans over fairness and the free market.
President Obama pitched his plans to Congress and a country underwhelmed by his handling of the economy. He vowed to fight congressional obstruction with action.
Targeting anxiety about a slumping middle class, the president called for the rich to pay more in taxes. Every proposal was underlined by the idea that hard work and responsibility still count.
The president urged higher taxes on the wealthy and pushed to help U.S. manufacturers expand hiring. He said businesses that create jobs at home and bring them back from overseas should be rewarded with tax breaks and aided with funding.
The president also urged Congress to allow funding for infrastructure and domestic projects.
"Take the money we're no longer spending at war, use half of it to pay down our debt, and use the rest to do some nation-building right here at home," President Obama said.
A rare wave of unity splashed over the House chamber at the start. Rep. Gabrielle Giffords, survivor of a shooting massacre one year ago, received sustained applause from her peers and hugs from many. Obama, too, embraced her as he made his way to the front.
Among this year's guests were Debbie Bosanek, the longtime secretary for billionaire Warren Buffett. Obama frequently cites Buffett's complaint that the nation's tax code is unfair because Buffet pays a lower tax rate than his secretary.
Laurene Powell Jobs, the wife of late Apple cofounder Steve Jobs, was also in attendance at Obama's prime-time address.
Giffords' husband, former astronaut Mark Kelly, sat next to first lady Michelle Obama.
President Obama delivered his address with his re-election campaign well under way and his potential Republican opponents lobbing attacks against him daily as they scrap for the right to take him on.
The commander in chief faces the tricky task of persuading voters to give him a second term even as joblessness remains at 8.5 percent.
In an exclusive Eyewitness News poll conducted by SurveyUSA, 61 percent of respondents said President Obama would be re-elected, 28 percent said he would be defeated and 11 percent said they were not sure.
Thirty-eight percent of respondents said that compared to one year ago, the U.S is worse off, 33 percent said it's better off, 28 percent said it's about the same and 1 percent said they were not sure.
The Associated Press contributed to this story.