WASHINGTON - President Barack Obama took a significant step toward retooling his presidency with a challenge to lawmakers to rise above partisan differences to tackle economic and budget problems "decades in the making".

And while there remained stark differences in the approach between the president and the Republicans with whom he now shares power, Obama made some striking concessions in the name of national unity - and asked others to do the same.

In a State of the Union address made somber by the recent Arizona shootings, Obama on Tuesday night coupled a call for budget restraint with a plea for more American innovation to allow the United States to better compete in the global economy.