President Obama's 2012 state of the union address tonight comes as the first salvos of the US presidential campaign are being fired. So far it has been the Republican contenders who have been dishing it out – and tonight is Barack Obama's first big chance to seize the nation's attention.

Tonight Obama has to walk the line between being the nation's commander in chief making new proposals and as an incumbent running for re-election in 10 months time, with the weak American economy once again hanging over proceedings.

The address itself – a requirement of the president mandated in the US constitution – starts at 9pm ET (2am GMT), when Obama address the joint houses of Congress as well as members of his administration, cabinet and the US supreme court.

But the real audience is the tens of millions viewers watching at home, with the address carried live on the major networks – ABC, CBS, FOX and NBC – and the Spanish language channels Telemundo and Univision, as well as the cable news channels CNN, CNBC, Fox News and MSNBC.

Last year's state of the union address reached 48 million people, according to Neilsen, while George Bush's final address in 2007 drew 32 million.

We'll be live blogging the speech itself and all the reaction, including the official response from Mitch Daniels, the Republican governor of Indiana, and the GOP presidential candidates, including Newt Gingrich and Mitt Romney.

Feel free to leave your comments below. Before we get underway, catch up with the action on the Republican campaign trail with our live blog of the day's activity.

We already have excerpts released by the White House ahead of the speech tonight – and the strongest line so far comes when Obama says: "No bailouts, no handouts and no cop-outs":

Think about the America within our reach: A country that leads the world in educating its people. An America that attracts a new generation of high-tech manufacturing and high-paying jobs. A future where we're in control of our own energy, and our security and prosperity aren't so tied to unstable parts of the world. An economy built to last, where hard work pays off, and responsibility is rewarded. ... The defining issue of our time is how to keep that promise alive. No challenge is more urgent. No debate is more important. We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by. Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules. What's at stake are not Democratic values or Republican values, but American values. We have to reclaim them. … As long as I'm president, I will work with anyone in this chamber to build on this momentum. But I intend to fight obstruction with action, and I will oppose any effort to return to the very same policies that brought on this economic crisis in the first place. No, we will not go back to an economy weakened by outsourcing, bad debt, and phony financial profits. Tonight, I want to speak about how we move forward, and lay out a blueprint for an economy that's built to last – an economy built on American manufacturing, American energy, skills for American workers, and a renewal of American values. ... Let's never forget: Millions of Americans who work hard and play by the rules every day deserve a government and a financial system that does the same. It's time to apply the same rules from top to bottom: No bailouts, no handouts and no cop-outs. An America built to last insists on responsibility from everybody.

Not to be outdone, the Republicans have released portions of Mitch Daniels's pre-butal from his official response to the state of the union:

It's not fair and it's not true for the President to attack Republicans in Congress as obstacles on these questions. They and they alone have passed bills to reduce borrowing, reform entitlements, and encourage new job creation, only to be shot down nearly time and again by the President and his Democrat Senate allies. ... No feature of the Obama Presidency has been sadder than its constant efforts to divide us, to curry favor with some Americans by castigating others. As in previous moments of national danger, we Americans are all in the same boat. If we drift, quarreling and paralyzed, over a Niagara of debt, we will all suffer, regardless of income, race, gender, or other category. If we fail to shift to a pro-jobs, pro-growth economic policy, there will never be enough public revenue to pay for our safety net, national security, or whatever size government we decide to have.

Mitch Daniels isn't exactly the most dynamic speaker in the world. In fact he's usually not even the most dynamic speaker in an empty room. But doing the reply is tough: none of the trappings of power, and all the networks cut away after about two minutes – faster if they can manage it.

And the lucky member of the cabinet – who gets to stay behind in a secure location in case something dreadful happens and wipes out the American political class in Congress – is former Iowa governor and current agriculture secretary Tom Vilsack.

So in the worst case scenario, there's America's 45th president.

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Among the many guests of the president and first lady tonight is an unusual one: Warren Buffett's secretary, Debbie Bosanek. Why?

Well, Debbie Bosanek has become a figure of some national note, after her billionaire investor boss once suggested it was absurd that he should pay a lower tax rate than his secretary:

The face of the "Buffett Rule," the tax policy President Obama is pushing, inspired by Buffett's assertion that he shouldn't pay a lower tax rate than his secretary does, says she doesn't have anything to add to a tax-policy debate.

C-Span is the best channel to watch the state of the union on, because it just shows a live feed from the floor of Congress without commentary, and you get to look clever by saying "Oh look there's that guy from whatever" and so on.

It's basically prom night for elderly politicians.

Speaker of the House John Boehner is gavelling everyone to order, and as usual he sounds as if he's knocked back a couple of stiff ones before stepping up to the podium. Not that he has, it's just his manner. But even if he had, well good for him.

While we are waiting, here's some background on the usual TV viewing figures for the state of the union.

And why not, here's the text of George Washington's very first state of the union address, which includes this:

Uniformity in the currency, weights, and measures of the United States is an object of great importance, and will, I am persuaded, be duly attended to.

Will Obama do the same? Doubtful. He probably yearns to impose a European socialist style metric system (I'm channeling Newt Gingrich's brain there).

The joint session of Congress has risen as one for a standing ovation as congresswoman Gabrielle Giffords enters.

Giffords was shot in the head in Tuscon last January, and although she has by all accounts made a remarkable recovery, she has recently announced that she is stepping down from Congress.

Now the members of the Supreme Court and members of the cabinet – minus the agriculture secretary, as mentioned below – are making their way in to the chamber.

Justices Roberts, Kennedy, Breyer, Ginsburg and Kagan are all there. No Scalia or Thomas? No Sotomayor or Alito either.

And there's the president and Michelle Obama. The first lady looks fabulous in a sapphire blue dress, while the president looks gorgeous in – how can I describe this? – a sort of dark blue "suit" with a maroon tie and a white shirt.

Do they give POTUS Purell to use at the podium? Lots of germs on those hands. #sotu — Larry Sabato (@LarrySabato) January 25, 2012

Professor Larry Sabato is ever the practical one. Purell, for non-American readers, is a brand of hand sanitiser.

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We're just about under way.

Here we go: Boehner announces the president of United States, standing ovation and then we are off:

Mr Speaker, Mr Vice President, members of Congress, distinguished guests, and fellow Americans. Last month, I went to Andrews Air Force Base and welcomed home some of our last troops to serve in Iraq. Together, we offered a final, proud salute to the colors under which more than a million of our fellow citizens fought – and several thousand gave their lives.

Two quick standing ovations already, as Obama is going straight to his good stuff:

For the first time in nine years, there are no Americans fighting in Iraq. For the first time in two decades, Osama bin Laden is not a threat to this country. Most of al-Qaida's top lieutenants have been defeated. The Taliban's momentum has been broken, and some troops in Afghanistan have begun to come home.

Obama is using the example of the US military in Iraq for the rest of the US economy, which is mildly creepy:

Imagine what we could accomplish if we followed their example.... We can do this. I know we can, because we've done it before. At the end of world war two, when another generation of heroes returned home from combat, they built the strongest economy and middle class the world has ever known.

For that to happen, "we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules. What's at stake are not Democratic values or Republican values, but American values. We have to reclaim them."

After the good news, Obama takes us on a tour of the smoking wreckage of the economy when he took office. And there's the money quote:

The state of our Union is getting stronger. And we've come too far to turn back now. As long as I'm President, I will work with anyone in this chamber to build on this momentum.

That's a smart twist: it would be hard for Obama to deliver the traditional "the state of our Union is strong" in the current economic climate – but "getting stronger" is good place-holder.

And here's something a US president has not been able to say for a while: "Tonight, the American auto industry is back."

Obama then mentions that a company named Master Lock, with a unionised plant in Milwaulkee, is bringing jobs back from overseas, and outlines a series of tax proposals:

My message is simple. It's time to stop rewarding businesses that ship jobs overseas, and start rewarding companies that create jobs right here in America. Send me these tax reforms, and I'll sign them right away.

The Democrats like that and get to their feet, and we have that odd state of the union effect where half the audience (Democrats in this case) jumps to their feet and other half (Republicans) sit on their hands and whistle.

This is a very unusual presidential debate: the moderator hasn't stopped Obama speaking. In fact he appears to be the only candidate on stage.

Now he's on to international trade – a subject in which Obama has been repeatedly bashed by the Republicans, especially Mitt Romney. Hence this:

It's not right when another country lets our movies, music, and software be pirated. It's not fair when foreign manufacturers have a leg up on ours only because they're heavily subsidized. Tonight, I'm announcing the creation of a Trade Enforcement Unit that will be charged with investigating unfair trade practices in countries like China.

Software piracy? If only Congress would get an act to stop online piracy ... oh maybe not.

You may recall from the final season of the West Wing, Matthew Santos's presidential nomination hinged on a deal with the teacher's union over tenure? Well, tonight we have this:

Teachers matter. So instead of bashing them, or defending the status quo, let's offer schools a deal. Give them the resources to keep good teachers on the job, and reward the best ones. In return, grant schools flexibility: To teach with creativity and passion; to stop teaching to the test; and to replace teachers who just aren't helping kids learn.

Now this is something new: Obama has just proposed that the school leaving age be raised to 18, from the current age of 16:

So tonight, I call on every State to require that all students stay in high school until they graduate or turn eighteen.

Puzzled applause. I'm not sure the crowd know what to make of it.

A quick foray into immigration, not enough to actually do anything:

We should be working on comprehensive immigration reform right now. But if election-year politics keeps Congress from acting on a comprehensive plan, let's at least agree to stop expelling responsible young people who want to staff our labs, start new businesses, and defend this country. Send me a law that gives them the chance to earn their citizenship. I will sign it right away.

If you had Steve Jobs in a SOTU drinking game, then there you go. Watching from a seat near Michelle Obama is Laurene Powell Jobs.

So there's one thing that can get everyone on their feet here tonight – oil:

Right now, American oil production is the highest that it's been in eight years. That's right, eight years. Not only that – last year, we relied less on foreign oil than in any of the past 16 years.

Naturally, there just happens to be a guest there tonight who got laid off from a furniture factory but is now working for a former luxury yacht maker turned wind turbine manufacturer.

Very interested strategy being repeated here: Obama keeps saying along the lines of "I know that political division means we can't have comprehensive reform on tax/immigration/energy policy but can't we at least do [insert modest proposal] ... and send me a bill that creates jobs."

The Guardian's Ewen MacAskill is on the GOP campaign trail but is watching tonight's address from Miami – and sends his thoughts:

This seems better than Obama's earlier State of Union speeches. Maybe he is better at campaigning than being in office. All these proposals, from tax reforms to comprehensive immigration reform, sound good. The problem is that he needs Congress to pass them, and that is not going to happen. But a good platform all the same to fight for re-election. Having watched Romney and Gingrich over the last few weeks, Obama is far and away a much better speaker and politician.

And a brief fire alarm in the office here, that was exciting. Have I missed anything? No, he's still there.

Obama makes a joke! Talking about regulatory reform, he says:

We got rid of one rule from 40 years ago that could have forced some dairy farmers to spend $10,000 a year proving that they could contain a spill – because milk was somehow classified as an oil. With a rule like that, I guess it was worth crying over spilled milk.

Nurse, fetch me a stapler because my sides have split! Obama goes on:

I'm confident a farmer can contain a milk spill without a federal agency looking over his shoulder. But I will not back down from making sure an oil company can contain the kind of oil spill we saw in the Gulf two years ago.

Meanwhile, some new efforts to regulate Wall Street, including a new "Financial Crimes Unit of highly trained investigators to crack down on large-scale fraud". And after three years, finally this:

Tonight, I am asking my Attorney General to create a special unit of federal prosecutors and leading state attorneys general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis. This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans.

The Huffington Post's Sam Stein has more background:

The office, part of a new Unit on Mortgage Origination and Securitization Abuses, will be chaired by Eric Schneiderman, the New York attorney general, according to a White House official. Schneiderman is an increasingly beloved figure among progressives for his criticism of a proposed settlement between the 50 state attorneys generals and the five largest banks. His presence atop this new special unit could give it immediate legitimacy among those who have criticized the president for being too hesitant in going after the banks and resolving the mortgage crisis.

Nearly an hour up now – and Obama gets on to Warren Buffett's secretary and how much tax she pays:

Right now, because of loopholes and shelters in the tax code, a quarter of all millionaires pay lower tax rates than millions of middle-class households. Right now, Warren Buffett pays a lower tax rate than his secretary. Do we want to keep these tax cuts for the wealthiest Americans? Or do we want to keep our investments in everything else – like education and medical research; a strong military and care for our veterans? Because if we're serious about paying down our debt, we can't do both.... Now, you can call this class warfare all you want. But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense.

So it feels like a rather non-partisan speech – although Republicans may disagree, we'll find that out later – and Obama is now moving into his healer-in-chief mode:

We need to end the notion that the two parties must be locked in a perpetual campaign of mutual destruction; that politics is about clinging to rigid ideologies instead of building consensus around common sense ideas. I'm a Democrat. But I believe what Republican Abraham Lincoln believed: That Government should do for people only what they cannot do better by themselves, and no more.

So far Abraham Lincoln is the only previous president mentioned by name, I'll check.

Did Obama just call for the end of the filibuster – the need for 60 votes out of 100 to end debate, or cloture – in the Senate? This is what he said:

A simple majority is no longer enough to get anything – even routine business – passed through the Senate. Neither party has been blameless in these tactics. Now both parties should put an end to it.

Interesting.

If you had Arab Spring in the drinking game ... well you're still sober, although he has referred to it but not by name.

But now it's the two Is: Iran and Israel –

Let there be no doubt: America is determined to prevent Iran from getting a nuclear weapon and I will take no options off the table to achieve that goal. But a peaceful resolution of this issue is still possible, and far better, and if Iran changes course and meets its obligations, it can rejoin the community of nations.

and shortly after that:

Our iron-clad commitment to Israel's security has meant the closest military cooperation between our two countries in history.

Here's a special feisty section, aimed at the Republican presidential contenders and delivered by Obama with brio:

From the coalitions we've built to secure nuclear materials, to the missions we've led against hunger and disease, from the blows we've dealt to our enemies, to the enduring power of our moral example: America is back. Anyone who tells you otherwise, anyone who tells you that America is in decline or that our influence has waned, doesn't know what they're talking about.

Got that, Romney and Gingrich?

And just the briefest of mentions of the ending of "don't ask, don't tell," although neatly done:

When you put on that uniform, it doesn't matter if you're black or white, Asian or Latino, conservative or liberal, rich or poor, gay or straight. When you're marching into battle, you look out for the person next to you, or the mission fails.

Strong finish here from Obama, going back to where he started with the example of the military in its unity of purpose, the highpoint being the mission that killed Bin Laden:

One of my proudest possessions is the flag that the Seal Team took with them on the mission to get Bin Laden. On it are each of their names. Some may be Democrats. Some may be Republicans. But that doesn't matter. Just like it didn't matter that day in the Situation Room, when I sat next to Bob Gates – a man who was George Bush's defense secretary; and Hillary Clinton, a woman who ran against me for president.

Clever touch. Here's the big finish:

All that mattered that day was the mission. No one thought about politics. No one thought about themselves.... More than that, the mission only succeeded because every member of that unit trusted each other – because you can't charge up those stairs, into darkness and danger, unless you know that there's someone behind you, watching your back. So it is with America. Each time I look at that flag, I'm reminded that our destiny is stitched together like those fifty stars and those thirteen stripes. No one built this country on their own. This Nation is great because we built it together. This Nation is great because we worked as a team. This Nation is great because we get each other's backs. And if we hold fast to that truth, in this moment of trial, there is no challenge too great; no mission too hard. As long as we're joined in common purpose, as long as we maintain our common resolve, our journey moves forward, our future is hopeful, and the state of our Union will always be strong. Thank you, God bless you, and may God bless the United States of America.

And that's it. Well played, I'd say – except that the deification of the military as the role model for a market democracy is uncomfortable. I hesitate to say this but if Republicans came out with those lines, I can guess what the left would accuse them of.

The Guardian's Ewen MacAskill from a hotel room in Miami:

This is one of the most populist speeches I have ever heard. He has just called for curbs on influence of money on politics. Add that to a list that includes comprehensive immigration reforms, supporting clean energy industry, help for mortgage owners, cutting red tape, crack down on financial fraud, including investigation into housing market collapse, help for college students. Almost none of this, maybe none of it, is going to happen soon. But good politics to highlight difference between where he stands and where the Republicans in Congress stand.

And a tweet that bring together the speech's two themes of Bin Laden and Warren Buffett's secretary:

We also killed Bin Laden's Secretary. For fairness. — mitrebox (@mitrebox) January 25, 2012

Well I laughed.

Hear that noise? It's the sound of a million press releases hitting my inbox. And the winner is ... Charlie Rangel, who must have sent this press release shortly after Obama sat down at his 2011 state of the union address.

Here's Mitch Daniels. When the cameras go live he appears to be wrestling with a lion while flanked by blonde Amazons ... no he's just a guy with a comb-over in a suit.

He's known as a fiscal hawk, and this must be true because Daniels appears to have refused to have turned on any lights for this telecast.

Actually now he's warmed up a bit I can see why Republicans were keen on him running for the presidency: he sounds like he can chew gum and talk at the same time. He's better than Bobby Jindal, that's for sure: Worst. Response. Ever.

Daniels is still banging on, and has just delivered a fabulously silly metaphor about America going over a Niagra of debt. Or possibly death. Or possibly Viagra of death. Hmm.

Lots of people taking the mickey out of Mitch Daniels on Twitter – elite liberal social media – but he seems sane compared with the shouty madness of Romney, Santorum and Gingrich.

Paul Begala on CNN, though, says that Daniels's speech was "like a glass of milk with a fly in it".

The Guardian's Suzanne Goldenberg looks at the environmental angles in Obama's address tonight, and inds little to cheer:

The word "Keystone" did not cross Obama's lips – even though he is getting hammered by Republicans for his decision last week to reject an expansion of the controversial pipeline to pump Alberta crude across six American states to refineries on the Texas coast. The other big unmentionable was Solyndra, the solar company that was first in line for an Obama clean energy loan – and then went bankrupt last year. Both topics are now staples for Mitt Romney and Newt Gingrich's stump speeches. Obama did, indirectly, acknowledge Solyndra, saying: "Some technologies don't pan out, some companies fail. But I will not walk away from the promise of clean energy." There was only one mention of climate change – which is one more than last year's state of the union. But it was in a line in which Obama said there was little chance of Congress passing climate change legislation. On the other energy and environment issues, it was not immediately clear whether Obama was speaking retrospectively. He talked about opening up more areas for offshore drilling – although he did that in 2011. He said he would require oil and gas companies to disclose what chemicals they use in the controversial process known as fracking – even though most states already require such disclosures. Obama also mentioned expanding clean energy projects – such as giant solar farms – on public lands, generating enough electricity for 3m homes a year. The department of energy approved 18 such projects by the end of last year that, by conservative estimates, would power at least that many homes.

Hey it's Michele Bachmann on Fox News! I'd forgotten she existed.

Greta Van Susteren foolishly persists in asking Bachmann sensible questions but now Bachmann isn't running for president so she doesn't even have to pretend to be sane.

Apparently Herman Cain is giving a Tea Party response to the state of the union but I can't find it anywhere.

According to Twitter's government team – wait, Twitter has a government unit? – peak tweets per minute during the SOTU came after the "spilled milk" line: 14,131 TPM at 9:51pm ET.

See, jokes work.

Ha, I have just noticed that here in Washington DC, "Bobby Jindal" is trending on Twitter.

This was the finest #RepublicanResponse since the hilarious network premiere of 'Bobby Jindal, Boy Governor.' — John Fugelsang (@JohnFugelsang) January 25, 2012

That's how bad his 2010 state of the union response was. Every year it reminds people to find it.

Josh Barro, an economist at the Manhattan Institute, has been live blogging the state of the union address, and he is disappointed with what wasn't mentioned by Obama:

As I feared, the speech contained no discussion of monetary policy whatsoever. There was a housing proposal designed to help underwater homeowners, but it's not very good. Very strangely, the President did not call on Congress to extend the 99-week Unemployment Insurance program that is set to expire on February 29. Is the White House preparing to back down on UI? Or did they just not think it was important enough to mention in the speech?

But Barro doesn't think much of Mitch Daniels's reply either:

I don't like this speech, either. The big problem is similar to Obama's speech: no proposals to improve monetary policy or housing policy. Additionally, he drastically overstates the risks created by fiscal deficits. A fiscal adjustment is needed, but not immediately, and it is not job one. We do not have "a short grace period" before falling into a Greek-style fiscal hole – we have a long grace period.

He's right about the housing market, which remains the single biggest dead weight on the US economy.

Mitt Romney pops up on telly. And guess what? He didn't like Obama's speech:

What he says and what he does are so dramatically different. Where was he during his first two years? Why didn't he get these things done during his first two years?

Because he was too busy passing Massachusetts's healthcare into federal law?

The Republican National Committee has been hard at work since the speech ended, putting together this nifty attack.

It cleverly compares lines of rhetoric from tonight's speech with the state of the union addresses in 2011 and 2010. Not damning perhaps, but for an American political attack ad, quite subtle.

For some reason I spent time looking for Herman Cain's response but I don't know why I bothered: he hasn't been suddenly endowed with wisdom since dropping out of the Republican presidential race.

So there we had a speech from President Obama that was in may ways a good one, because Obama steered clear of some of usual rhetorical flourishes, such as praising himself, and avoided blaming everything on the Republicans, which was much of the 2011 state of the union. Instead it was, although long, quite a lean speech, sticking to familiar lines. He particularly avoided more contentious areas of policy, such as healthcare.

The one interesting area was on education, specifically proposals to shake up teachers and to extend the compulsory schooling age to 18. But the details remain to be seen, and until then there's not much else to say.

Similarly, some interesting sounding ideas on financial malpractice that feel at least two years two late, and a still-to-be-announced plan on helping homeowners re-finance their mortgages. But nothing root and branch, which the housing market would require.

Then again, Obama knows that little of legislative worth can be done given the current state of politics in Washington and the shrinking envelope of possibilities before the general election swallows everything up.

And as for the election: based on tonight's address, the White House still thinks that Mitt Romney is the most likely candidate to be facing Obama in the fall. The New York Times is spot on with this reading:

When Mr Obama talked about levying a millionaires tax, he might have been referring to Mr Romney's newly released tax return, which disclosed he paid a tax rate of 13.9% on income of more than $20m in 2010. When he referred to his administration's bailout of the auto industry, noting that "some even said we should let it die," he could have been talking about Mr Romney's argument that the carmakers should have been allowed to fail.

And so on.