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 Deficit spending, the president's biggest conflict with Republicans, got only one passing mention. And he never uttered the word "debt."
Never fear, Republicans seemed to say in response. They will press the overspending issue time and again, starting this week in the GOP-controlled House. And the outcome of the two parties' long-running conflict will help shape the government's role in coming years, not to mention Obama's legacy.
All presidents want to drive the national agenda. Inauguration Day is their moment to lay out their visions. As Obama rudely learned in his first term, however, unforeseen events quickly intervene, and a president's fate is to adjust, improvise and re-order priorities.
After winning his first election with a call for greater unity and cooperation in Washington, Obama appeared to be taken aback by the ferocity of Republican resistance. It gave birth to the tea party in 2009, forced him to pass "Obamacare" without a single GOP vote, and fueled huge Democratic setbacks in the 2010 congressional elections.
Last November's election chastened Republicans a bit. But they still adamantly oppose the president's tax-and-spend policies. That poses the central challenge to his hopes for an ambitious second-term agenda.
Obama's re-election as the nation's first black president deepens his place in history. But his handling of a hostile U.S. House, as one "fiscal cliff" gives way to the next, will help determine the luster of his legacy.
In Monday's comparatively short speech, Obama recited a litany of liberal ideals.
"Our journey is not complete until our gay brothers and sisters are treated like anyone else under the law," he said. He hailed equal pay for women, investments in infrastructure, regulation of markets and treatment of immigrants so they are "enlisted in our workforce rather than expelled from our country."
His speech could have been called "It Takes a Village." "Preserving our individual freedoms ultimately requires collective action," Obama said.
His sharpest warning to Republicans began with his single acknowledgement of the fierce deficit-spending debate.
"We must make the hard choices to reduce the cost of health care and the size of our deficit," the president said. "But we reject the belief that America must choose between caring for the generation that built this country and investing in the generation that will build its future."
He specifically defended Medicare, Medicaid and Social Security. Although Obama has expressed a willingness to slow the growth of these costly programs, he seemed to caution Republicans to back off the deeper cuts they propose.
Obama starts his second term facing three immediate priorities: restoring the economy's health, overhauling immigration laws and reducing gun violence. He also vowed Monday to "respond to the threat of climate change." That issue, however, seems likely to wait its turn.
The president chose the timing and outlines of his immigration push, knowing that many Republicans desperately want to improve their own standing with Hispanic voters.
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 The other issues were thrust upon Obama, chiefly by the economic crisis he inherited four years ago and by last month's massacre of school children in Connecticut. He briefly mentioned the school tragedy Monday, but cited none of the gun-control ideas he embraced last week.
Restoring the economy has been Obama's biggest challenge. Any relapse into recession could put millions of Americans out of work and vastly complicate his hopes for second-term achievements.
From the start, two forces have pulled at him on the economy. Liberal economists implored the president to pour federal money into stimulus programs, saying the deficit's resulting spike could be addressed later. But anti-deficit activists gained ascendancy in the Republican Party, demanding deep spending cuts without detailing who would pay the price.
Deficit reduction remains the GOP battle cry. House Republicans recently agreed to postpone a showdown on the debt ceiling by three months but say they will use other coming budget deadlines to extract reductions in social programs from reluctant Democrats.
"Spending has raged out of control and America's debt has ballooned," House Republican Conference Chair Cathy McMorris Rodgers said in her response to Obama's speech Monday. Senate Republican leader Mitch McConnell promised Obama a "fresh start," but reminded him of "the transcendent challenge of unsustainable federal spending and debt."
The Republicans' highest-ranking official, House Speaker John Boehner, used a Lincoln quote to offer Obama an olive branch. The nation's leaders, Boehner said at a Capitol luncheon, were assembled to "renew the old appeal to better angels."
Obama on Monday seemed to signal a willingness to work with Republicans, couched in a reminder that he won the last election and thus can't be expected to yield very much.
Boehner and his fellow Republicans this week will craft the next legislation in the deficit-spending confrontations. It will be the first of many tests of whether the nation's "better angels" can break through a barrier of bitter standoffs.
[Associated
Press; By CHARLES BABINGTON]
Charles Babington covers Congress and national politics for The Associated Press.
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