WASHINGTON -- President Barack Obama returned to the unfinished business of a still struggling economy Tuesday night, outlining a second-term agenda with proposals designed to create jobs, expand the middle class and spur financial growth.

"We can fix this -- and we will," the president said repeatedly.

In his annual State of the Union address, Obama laid out plans in four main areas -- manufacturing, education, clean energy and infrastructure -- to try to help the nation recover from the worst recession in decades at what he said would be no additional cost.

"A growing economy that creates good, middle-class jobs -- that must be the North Star that guides our efforts," Obama said. "Every day, we should ask ourselves three questions as a nation: How do we attract more jobs to our shores? How do we equip our people with the skills they need to get those jobs? And how do we make sure that hard work leads to a decent living?"

Obama described a nation that has made progress, ending long wars in Afghanistan and Iraq while clearing away "the rubble" of the Great Recession, but one that still needs additional help to prosper. He declared that the state of the union is stronger, but not strong.

"It is our generation's task, then, to reignite the true engine of America's economic growth -- a rising, thriving middle class," he said.

"It is our unfinished task to restore the basic bargain that built this country _ the idea that if you work hard and meet your responsibilities, you can get ahead, no matter where you come from, no matter what you look like, or who you love. It is our unfinished task to make sure that this government works on behalf of the many, and not just the few; that it encourages free enterprise, rewards individual initiative, and opens the doors of opportunity to every child across this great nation of ours," he said.

He proposed raising the minimum wage from $7.25 to $9 an hour. He recommended spending $65 billion on road, bridge and building repairs. He unveiled a plan to save eligible homeowners $3,000 annually by refinancing at lower interest rates.

Obama starts his second term with a stubbornly high unemployment rate _ higher for women and blacks than when he first took office -- falling consumer confidence and a mounting deficit as he faces often uncooperative lawmakers on Capitol Hill. He insisted that Democrats and Republicans put aside their differences and take action, mostly immediately to find an alternative to looming across-the-board budget cuts that could harm the economy in weeks.

"The American people don't expect government to solve every problem," he said. "They don't expect those of us in this chamber to agree on every issue. But they do expect us to put the nation's interests before party. They do expect us to forge reasonable compromise where we can."

Tens of millions watched the hour-long address, delivered to a joint session of Congress. The applause mostly fell along partisan lines, with House Speaker John Boehner, R-Ohio, sitting behind Obama often with a solemn expression while Vice President Joe Biden beside him stood to applaud.

Sen. Marco Rubio of Florida, a rising Republican star, offered his party's response in English and Spanish. Rubio said the "free enterprise economy" will create jobs and, not as Obama has suggested, the collection and spending of new revenue.

"The idea that more taxes and more government spending is the best way to help hardworking middle-class taxpayers -- that's an old idea that's failed every time it's been tried," he said. "More government isn't going to help you get ahead. It's going to hold you back. More government isn't going to create more opportunities. It's going to limit them."

Obama spoke about other issues Tuesday -- including rewriting the nation's immigration laws and combating climate change -- but mostly in the context of the economy.

There were a few exceptions: Obama pressed for the most aggressive gun-control plan in generations. In the most emotional moment of the speech, he delivered an impassioned call for a vote on gun control bills by listing the "communities ripped open by gun violence" -- from Aurora, Colo., to Newtown, Conn. As he spoke, cameras cut to people in the visitors' galleries, some crying, some holding up photos of people presumably slain in mass shootings.

"They deserve a simple vote," he said. The room erupted in sustained applause.

Obama announced that he will form a nonpartisan commission to study changes in the voting system after Americans endured long lines and administrative problems at the polls by singling out 102-year-old Desiline Victor, a North Miami woman who waited six hours in line to vote in November.

He said that by this time next year more than half the U.S. troops in Afghanistan -- 34,000 -- will have returned home as the Afghans take responsibility for security. He condemned North Korea for conducting its third nuclear test hours earlier, warning that it undermines regional stability, violates North Korea's United Nations obligations and increases the risk of proliferation. He called for a reduction in nuclear weapons worldwide.

Obama will fly to Asheville, N.C., on Wednesday to begin selling his plans to the nation. Later in the week, he will continue the campaign-style pitch with stops in Atlanta and Chicago.

"He's going to take his press conference out to the country," said Rep. Sander Levin of Michigan, the highest-ranking Democrat on the tax-writing House Ways and Means Committee. "The president learned from his first term, you need to have a major dialogue."

He pressed for cuts in projected deficits by eliminating tax loopholes and deductions benefiting certain industries or the wealthy as well as by cutting projected spending.

And he urged Congress to pass a package of modest cuts and tax changes as a way to delay drastic, across-the-board federal spending reductions that are scheduled to take effect March 1.

White House officials said the president will pay for his spending proposals by re-prioritizing items in the budget. His proposed budget will be released in mid-March.

"Tonight, I'll lay out additional proposals that are fully paid for and fully consistent with the budget framework both parties agreed to just 18 months ago," he said. "Let me repeat -- nothing I'm proposing tonight should increase our deficit by a single dime. It's not a bigger government we need, but a smarter government that sets priorities and invests in broad-based growth."

Obama announced that he issued executive orders, which do not require congressional approval, to open three manufacturing institutes and to improve the security of the computer networks that direct the nation's crucial infrastructure systems -- such as electricity, finance and transportation. And he threatened to sign more if Congress does not pass changes to prepare for climate change.

Kevin G. Hall and David Lightman of the Washington Bureau contributed.

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