01/24/2012 11:08 EST | Updated 03/25/2012 05:12 EDT

Obama says economic fairness key to resurgence

Economic fairness is the defining issue facing the United States as it heads into 2012, President Barack Obama said Tuesday night in his third state of the union address.

"No challenge is more urgent, no debate is more important," the president told the combined House of Representatives and Senate in Washington, D.C.

"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," the president said. "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.

"What's at stake are not Democratic values or Republican values, but American values," Obama said in a speech widely regarded as setting the tone for his re-election campaign.

Growth in job figures

Obama pointed to improving economic numbers as proof that his administration has been able get the nation moving in the right direction. In particular, he referred to the resurgent growth of U.S. auto manufacturers and the role the government bailout played in it.

"We bet on American workers," Obama said. "We bet on American ingenuity. And tonight, the American auto industry is back."

He also issued a not-so-veiled threat to his Republican opponents over what he called their "obstructionist tactics in Congress."

"As long as I'm president, I will work with anyone in this chamber to build on this momentum," the president said. "But I intend to fight obstruction with action, and I will oppose any effort to return to the very same policies that brought on this economic crisis in the first place."

The speech identified his vision of a renewed American industrial base that would reduce unemployment, which remains above eight per cent across the country, and the nation's dependency on energy from dangerous areas of the world.

"Think about the America within our reach: A country that leads the world in educating its people; an America that attracts a new generation of high-tech manufacturing and high-paying jobs; a future where we're in control of our own energy, and our security and prosperity aren't so tied to unstable parts of the world. An economy built to last, where hard work pays off and responsibility is rewarded," the president said.

"We can do this. I know we can, because we have done it before," pointing to the return of U.S. troops at the end of the Second World War who created a thriving middle class.

Widening wealth gap

The president also refused to back down on his vision of a green energy industry in the United States.

"We have subsidized oil companies for a century, that’s long enough," Obama said. "It’s time to end the taxpayer giveaways to an industry that’s rarely been more profitable, and double-down on a clean energy industry that’s never been more promising. Pass clean energy tax credits and create these jobs."

However, the theme of reducing the widening gap between the country's wealthiest citizens and the middle class was front and centre during the evening, even in terms of those who were invited to attend.

Billionaire Warren Buffet's longtime secretary, Debbie Bosanek, joined the president's wife, Michelle Obama, in her box for the address.

Bosanek, who has worked for Buffett for nearly two decades, has become the poster child for the Obama administration's battle over tax code inequalities and economic fairness. Buffett and several other billionaires appeared before Congress to point out that secretaries such as Bosanek pay a higher tax rate than they do.

Obama's speech came on the same day that Republican presidential hopeful Mitt Romney, a multimillionaire, released his tax returns, offering a vivid illustration of his wealth that could play into the president's argument about the growing divide between rich and poor.

In the hours leading up to the speech, experts said Obama would use it as a springboard into his re-election campaign.

"Almost by definition, it's going to be at least as much a political speech as a governing speech," said Bill Galston, a former Clinton administration domestic policy adviser now at the Brookings Institution.

"The president must run on his record," Galston said, "and that means talking candidly and persuasively with the country about the very distinctive nature of the challenges the American economy faced when he took office and what has gone right for the past three years, and what needs to be done in addition."