Obama's State of the Union speech to a joint session of Congress and millions of Americans watching at home served as the opening salvo in a fight for control of Congress ahead of the November election. Democrats, seeking to cast Republicans as uncaring about the middle class, have urged Obama to focus on economic mobility and the gap between the wealthy and poor.
His focus on executive actions that don't need congressional approval was greeted with shouts of "Do it!" from many Democrats.
"Inequality has deepened. Upward mobility has stalled," Obama said. "The cold, hard fact is that even in the midst of recovery, too many Americans are working more than ever just to get by — let alone get ahead."
For Obama, the address was also aimed at convincing an increasingly skeptical public that he still wields power in Washington even if he can't crack through the divisions in Congress. Burned by a series of legislative failures in 2013, White House aides say they're now redefining success not by what Obama can jam through Congress but by what actions he can take on his own.
While domestic issues dominated the speech, Obama also warned Congress he would veto any sanctions bill that threatens to derail talks with Iran, even as he acknowledged that the talks may not succeed.
The hour-long speech came as Obama is trying to recover from the blundered rollout of his signature health care overhaul. An AP-GfK poll this month found 45 per cent of those surveyed approved of Obama and 53 per cent disapproved. That's worse than a year ago, when 54 per cent approved and 42 per cent disapproved, but an improvement over his ratings in December, when 58 per cent disapproved of his job performance.
Obama unveiled an array of executive actions, including increasing the minimum wage for some federal contract workers and making it easier for millions of low-income Americans to save for retirement.
His proposals for action by lawmakers were slim and largely focused on old ideas that have gained little traction. He pressed Congress to revive a stalled immigration overhaul and increase the minimum wage. His one new legislation proposal calls for expanding a tax credit for workers without children.
Turning to foreign policy, Obama said negotiations to stop Iran's nuclear program will be difficult and if they fail, he will call for more sanctions. "But if Iran's leaders do seize the chance, then Iran could take an important step to rejoin the community of nations, and we will have resolved one of the leading security challenges of our time without the risks of war."
On Syria, he pledged "to work with the international community to usher in the future the Syrian people deserve — a future free of dictatorship, terror and fear."
Obama reaffirmed that the U.S.-led war in Afghanistan will formally conclude at the end of this year. But he said a small contingent of American forces could be left behind if the Afghan government quickly signs a bilateral security agreement, a prospect that looks increasingly uncertain.
Obama said the United States "will continue to focus on the Asia-Pacific" and called the alliance with Europe "the strongest the world has ever known." Regarding the turmoil in Ukraine, he said "we stand for the principle that all people have the right to express themselves freely and peacefully, and have a say in their country's future."
But most of his address was devoted to domestic issues, which weigh most heavily on the minds of Americans.
Obama said he is eager to work with Congress on measures requiring lawmakers' approval. "But America does not stand still - and neither will I. So wherever and whenever I can take steps without legislation to expand opportunity for more American families, that's what I'm going to do," he said.
Republicans, who saw their own approval ratings fall further in 2013, have also picked up the refrain of income inequality in recent months, though they have cast the widening gap between rich and poor as a symptom of Obama's economic policies.
In the official response to Obama, Cathy McMorris Rodgers, a congressional leader, said the Republican Party "champions free markets - and trusts people to make their own decisions, not a government that decides for you."
Republicans have thwarted most of Obama's initiatives, including on gun control and climate change, and this year's elections make it even less likely that they will support his proposals. Still, the partisan fighting has eased somewhat from when Republicans shut down the government for 16 days last fall and brought the country to the brink of default.
Obama has some hope of winning support for an immigration overhaul, as Republicans try to build support among the country's growing Hispanic population ahead of the election.
But the White House sees a robust rollout of executive actions as the most effective way to show the public that Obama still wields power in the sixth year of his presidency.
"America does not stand still - and neither will I," Obama said. "So wherever and whenever I can take steps without legislation to expand opportunity for more American families, that's what I'm going to do."
Obama only briefly mentioned the controversy over U.S. spy programs revealed by former National Security Agency contractor Edward Snowden. He pledged to reform surveillance programs, "because the vital work of our intelligence community depends on public confidence, here and abroad, that the privacy of ordinary people is not being violated."
The annual speech is accompanied by great pomp and ceremony, with Washington's most powerful figures in attendance, including Cabinet members, diplomats and Supreme Court justices.
It also drew an eclectic mix of visitors to the House visitors' chamber. Among those sitting with first lady Michelle Obama were two survivors of the Boston Marathon bombing, as well as Jason Collins, an openly gay former NBA player. Republican House Speaker John Boehner brought business owners from his home state of Ohio who say Obama's health care overhaul is hurting their companies. Two lawmakers invited the mother and sister of Kenneth Bae, an American citizen held by North Korea.
Associated Press writers Julie Pace, Josh Lederman and Jim Kuhnhenn contributed to this report.