President Obama on Tuesday night urged Congress to avoid the sequester, warning the looming across-the-board spending cuts would jeopardize the nation’s military readiness, devastate policy priorities, slow the economic recovery and cost hundreds of thousands of jobs.

In his State of the Union address, he called for “a balanced approach to deficit reduction, with spending cuts and revenue, and with everybody doing their fair share.”

He rejected the proposals of some lawmakers to prevent defense spending cuts by making bigger cuts in areas like education and job training, as well as Medicare and Social Security.

“We can’t just cut our way to prosperity,” he said.

But he said the nation “must embrace the need for modest reforms” to Medicare and that he is prepared to enact reforms that will achieve the same amount of health care savings by the beginning of the next decade as the reforms by the bipartisan Simpson-Bowles commission.

He said he would be open to suggestions for Medicare reforms from both parties “so long as they don’t violate the guarantee of a secure retirement.”

The president noted that both parties have worked together to reduce the federal budget deficit by more than $2.5 trillion, mostly through spending cuts, but also by raising tax rates or the wealthiest 1% of Americans.

To achieve the rest of the $4 trillion deficit reduction target, Congress should “get rid of tax loopholes and deductions for the well-off and well-connected,” he said.

“Now is our best chance for bipartisan, comprehensive tax reform that encourages job creation and helps bring down the deficit,” he said. The tax code should be simplified and should ensure that “billionaires and high-powered accountants can’t pay a lower rate than their hard working secretaries,” he said.

Tax and entitlement reforms won’t be easy and “the politics will be hard for both sides,” he said. But he urged that party interests be set aside so that the administration and Congress can replace “reckless cuts” with “smart savings and wise investments in our future.”

The president proposed several initiatives, including a “Fix It First” program to put people to work as soon as possible on infrastructure repairs and a Partnership to Rebuild America that attracts private capital to upgrade ports and shore up infrastructure to withstand storms.

He also proposed a one-time $1 billion investment to create a network of 15 manufacturing institutes across the country that will serve as partnerships between the private sector, governments, universities to develop and build manufacturing technologies.

In his speech, Obama said climate change is real and must be addressed, through executive actions and legislation.

He urged the minimum wage be increased to $9/hour and tied to the cost of living. He called for doubling renewable electricity generation by 2020 and the creation of an Energy Security Trust, funded by revenue from oil and gas development, that finds ways to wean cars and trucks from the use of oil. He called for immigration reform and action to reduce gun violence.

In response to the speech, Sen. Marco Rubio, R-Fla., and House Ways and Means and Committee Chairman Dave Camp, R-MIch., said Obama wants to increase spending and raise taxes and that this will hurt the middle class. Rubio rejected the charge that Republicans simply want to help the rich.

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