State of the Union: Obama Makes Jobs Priority No. 1

"The commission will have to provide a specific set of solutions by a certain deadline," he said.

But one of the lead sponsors of the failed bill, Sen. Kent Conrad, D-N.D., said a commission created by executive order and not by Congress itself was of questionable worth.

"I don't see how that's effective, because there's no assurance at all of a vote on the recommendations of the commission," Conrad told reporters Tuesday.

The Senate bill would have required Congress to vote on its recommendations.

Obama renewed his pledge to repeal the "Don't Ask, Don't Tell" ban on gays and lesbians serving openly in the military.

"This year, I will work with Congress and our military to finally repeal the law that denies gay Americans the right to serve the country they love because of who they are," Obama said.

Though he planned to work on the repeal this year, Obama did not seem to guarantee it would be repealed in 2010.

The president ran through a list of domestic policy priorities he wants to push this year, including an education overhaul.

"The idea here is simple: instead of rewarding failure, we only reward success," he said. "Instead of funding the status quo, we only invest in reform -- reform that raises student achievement, inspires students to excel in math and science, and turns around failing schools that steal the future of too many young Americans, from rural communities to inner cities."

Some education programs in the budget will be consolidated, but overall there will be a 6.2 percent increase in funding for the Department of Education, including an additional $1.35 billion for the Race to the Top program, to be expanded with a separate competition for school districts.

Obama Says Nation Facing 'Deficit of Trust

Obama said the nation is not just staring down a deficit of dollars but also a "deficit of trust -- deep and corrosive doubts about how Washington works that have been growing for years."

In order to fix that, Obama said action has to be taken on both ends of Pennsylvania Avenue -- at the White House and on Capitol Hill.

Obama called for "strict limits" on the amount of money that lobbyists can give to political candidates. He will issue an order to Congress to come up with legislation that would reverse last week's Supreme Court decision that said corporations should not be restricted from spending unlimited amounts on political commercials.

"I don't think American elections should be bankrolled by America's most powerful interests, and worse, by foreign entities," he said. "They should be decided by the American people, and that's why I'm urging Democrats and Republicans to pass a bill that helps to right this wrong."

Obama reiterated his commitment to energy reform and earned bipartisan applause for advocating for the building of new nuclear power plants as a way to create clean energy jobs.

With such a heavy emphasis on domestic policy and the economy, the president seemed to gloss over the foreign policy items on his agenda this year. He noted the troop increase in Afghanistan and withdrawal of troops from Iraq and the continued work with Russia on nuclear disarmament.

Obama stressed his administration's commitment to working with allies.

"That is the leadership that we are providing -- engagement that advances the common security and prosperity of all people," he said.

There was no mention of Middle East peace talks or his administration's plans to close the detention center at Guantanamo Bay.

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