Saying the country "cannot win the future with a government of the past," President Barack Obama stressed the importance of innovative job creation and smart deficit reduction in his State of the Union Address Tuesday.

The nation's commander-in-chief began by noting the presence of an empty chair set aside for Arizona Congresswoman Gabrielle Giffords, who continues to recover from the deadly shooting attack in Tucson.

"What comes of this moment will be determined not by whether we can sit together tonight, but whether we can work together tomorrow," Obama said.

The president called for a five-year freeze in non-security, discretionary spending -- a move that's expected to reduce the deficit by more than $400 billion over the next decade.

"Every day, families sacrifice to live within their means. They deserve a government that does the same," Obama said.

But shifting left, Obama also said the country can’t afford to make permanent tax cuts for the wealthiest two percent, recently extended for two years in a deal with Republicans.

Calling this our generation’s "Sputnik moment," Obama also outlined his goals to improve the nation's education, innovation and infrastructure to make the country more of a global competitor.

"We are the nation that put cars in driveways and computers in offices; the nation of Edison and the Wright brothers; of Google and Facebook. In America, innovation doesn’t just change our lives. It’s how we make a living," Obama said.

The president referenced a high-speed rail network accessible to 80 percent of the country in 25 years and a million electric cars on the road by 2015, with investments in clean energy paid for, in part, by cutting subsidies to oil companies.

On the subject of job creation, he challenged lawmakers to determine whether new jobs, industries take root at home or abroad.

On the issue of healthcare, Obama defended the recently passed reform bill but says he's open to ways to "fix what needs fixing and move forward."

While some lawmakers dismissed a plan to cross the aisle and sit together during Tuesday night's speech, other Democrats and Republicans said it was a much needed sign of unity.

Among the special guests at Tuesday's address was Daniel Hernandez; Congresswoman Giffords' intern who was hailed as a hero for helping to save her life the day of the shooting.

Hernandez is scheduled to come to New York on Wednesday, where Mayor Michael Bloomberg plans to honor him at City Hall.

Hernandez supports Bloomberg's efforts to change the federal gun background check system.

The family of nine-year-old Christina Taylor Green, who was killed in the shooting, sat with First Lady Michelle Obama for the speech.

Among those not in attendance was Supreme Court Justice Samuel Alito, though it's unclear if it's related to his displeasure last year when President Obama sharply criticized the court’s decision in the Citizens United case.

Gov't Spending Focus Of GOP Response

Congressman Paul Ryan of Wisconsin delivered the Republican's response to the president's address.

Seen as a rising member of the party, Ryan is the chair of House Budget Committee and focused squarely on the economy.

Ryan wasted no time in waving the party's flag by pointing the finger at what he called out of control big government spending.

"There is no doubt the president came into office facing a severe fiscal and economic situation," said Ryan. "Unfortunately, instead of restoring the fundamentals of economic growth, he engaged in a stimulus spending spree that not only failed to deliver on its promise to create jobs, but also plunged us even deeper into debt. The facts are clear: since taking office, President Obama has signed into law spending increases of nearly 25 percent for domestic government agencies -- an 84 percent increase when you include the failed stimulus."

Taking a shot at the president's healthcare reform law, Ryan accused the Obama Administration of trying to do too much to soon, which made fiscal matters worse.

Towing the party line he said limited government, lower taxes, and reasonable regulation would be the key to job creation and economic growth.