United States President Barack Obama has challenged the opposition Republicans to adopt limited spending cuts and invest in new research and education to create jobs.
In his annual State of the Union address on Tuesday, Mr Obama told Congress that the US is "poised for progress" after "the worst recession most of us have ever known" and the country needs to out-innovate, out-educate and out-build the rest of the world.
Mr Obama said this is a "Sputnik moment", referring to the rise in research and education spending which followed the Soviets beating the US into space in 1957.
"Half a century ago, when the Soviets beat us into space with the launch of a satellite called Sputnik, we had no idea how we would beat them to the Moon. The science wasn't even there yet, Nasa didn't exist.
"But after investing in better research and education, we didn't just surpass the Soviets - we unleashed a wave of innovation that created new industries and millions of new jobs."
Mr Obama says in a few weeks he will be sending a budget to Congress on his proposals, saying the government will invest in biomedical research, information technology, and especially clean energy technology.
The State of the Union was Mr Obama's first address to Congress since the Republicans took control of the House of Representatives in November last year.
The BBC reports as expected, Mr Obama made a pitch for unity and progress, portraying what is for him a political necessity as a virtue. He also tried to put the depressing wreckage of the recession behind him and conjure a message of aspiration and optimism.
However, Republicans have warned that they will reject calls for additional spending.
Mr Obama also called for a new goal of 80% of America's electricity coming from clean energy sources by 2035.
He renewed his commitment to tackling terrorism around the world.
Freeze on domestic spending proposed
The president proposed a five-year freeze on domestic spending that he says will reduce the budget deficit by $US400 billion over a decade.
Mr Obama said now that the worst of the recession is over, legislators have to confront the fact that the US spends more than it takes in.
He urged Democrats and Republicans to work together and help America triumph over challenges posed by India and China, the new competitors in the world economy.
The spending freeze will not apply to big entitlement programmes including Social Security and Medicare, which are at the heart of the deficit problem, or to defence spending.