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Mr. Obama insisted there’s still a path to get a health care reform bill passed.

“Do not walk away from reform. Not now. Not when we are so close. Let us find a way to come together and finish the job for the American people,” he said.

But he didn’t offer any direction to Hill leaders on how to overcome the deep divisions among Democrats, who are sparring with each other over how much of a hand government should have in delivering health care, its hefty price tag and the touchy topic of abortion funding.

In the Republican response, Mr. McDonnell agreed that Americans need affordable, high-quality health care but offered a different route to get it.

“Republicans in Congress have offered legislation to reform health care, without shifting Medicaid costs to the states, without cutting Medicare, and without raising your taxes. We will do that by implementing common-sense reforms, like letting families and businesses buy health insurance policies across state lines, and ending frivolous lawsuits against doctors and hospitals that drive up the cost of your health care,” Mr. McDonnell said.

“And our solutions aren’t 1,000-page bills that no one has fully read, after being crafted behind closed doors with special interests.”

As for energy policy, Mr. Obama likewise reiterated his support for a cap-and-trade plan to combat global warming, urging the Senate to work through a deadlock on the issue as moderate Democrats from Rust Belt states are resisting the proposal approved by the House last summer. He also cited the need for new nuclear power plants and “making tough decisions about opening new offshore areas for oil and gas development.”

The speech was remarkable for the number of times members of Congress outright laughed at a claim the president made including Republicans chuckling at Mr. Obama when he called for a spending freeze, but said it will only kick in next year.

At one point an unidentified man standing in the back row behind House Democrats shouted out “Mr. President,” but those in front of him waved at him to be silent.

On spending, Mr. Obama said his second federal budget next week will call for halting government spending that’s not related to defense or entitlements at current levels for three years. If approved by Congress, such a move would save taxpayers $250 billion over a decade, according to the White House.

Mr. Obama proposed spending increases in certain areas, such as education — where he is asking for a 6 percent boost — but said the money would come from eliminating unnecessary programs in other parts of the budget. The additional dollars would go toward elementary and secondary education programs, as well as an extension of the administration’s Race to the Top program to reward states that adopt certain education reforms.

Mr. Obama repeated several proposals he made last year that haven’t been passed, such as creating a tax credit for employers who make new hires and eliminating the capital-gains tax on new investments in small businesses. He said he wants to use $30 billion in Wall Street bailout funds that banks have paid back to encourage community banks to lend to small firms.

Saying the country needs to double its exports over the next five years, Mr. Obama urged cooperation on international trade deals with South Korea, Panama and Colombia. The U.S. will lose out on jobs if it “sits on the sidelines while other nations sign trade deals,” he said.

In a nod to gay rights activists —some of whom have accused him of inaction after campaigning in support of their agenda — Mr. Obama urged lawmakers to overturn the military’s “don’t ask, don’t tell” policy banning gays and lesbians from serving openly.

“We find unity in our incredible diversity, drawing on the promise enshrined in our Constitution: the notion that we are all created equal, that no matter who you are or what you look like, if you abide by the law you should be protected by it; that if you adhere to our common values, you should be treated no different than anyone else,” he said. Mr. Obama waded into another perennially thorny issue with comments on immigration reform, but he didn’t offer any specifics.

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