WASHINGTON (MarketWatch) — In a skillful speech that aggressively promoted his own agenda while disarming the Republican opposition, President Obama called the deficit hawks’ bluff in his State of the Union speech.

He left not one but two Republican responders flailing helplessly about an issue Main Street has trouble grasping: our supposedly overwhelming mountain of debt. Rep. Paul Ryan, the official responder, sat in a dark and lonely hearing room talking a mile a minute about a “fiscal crisis” that no one else can detect.

The Wisconsin Republican bewailed “the crushing burden of debt” that is not visibly crushing anyone with high interest rates, runaway inflation or any other evil effect. What is hampering economic recovery is not the federal deficit but lack of investment resulting from lack of demand because people are out of work and often at risk of losing their homes.

Minnesota Rep. Michele Bachmann, the self-appointed spokeswoman for the tea-party movement, turned into an economist and addressed someone off to the right of the camera while she blamed Obama for high unemployment.

Tea party’s rebuttal

It’s hard to compete with the president standing at the podium in front of a joint session of Congress, with the assembled Cabinet, the Joint Chiefs of Staff and a quorum of the Supreme Court — including, noblesse oblige, a reluctant chief justice.

It’s especially hard to compete when you have nothing to say except that the sky is falling — which is what the premature hysteria about government debt and deficits is akin to.

Obama addressed the deficit. He proposed a five-year freeze on domestic spending that would reduce the proportion of the deficit, he said, to a level not seen since the Eisenhower administration.

With his rhetorical sleight of hand — referring to freezes on “domestic” spending and cuts in “discretionary” spending — Obama implicitly excluded Social Security, and later drew a fairly strong perimeter fence around it.

He also drew a line in the sand in calling for painful budget cuts. “But let’s make sure that we’re not doing it on the backs of our most vulnerable citizens,” he said.

And he took a jab at the tax cuts for high earners, saying they can’t be permanent. “Before we take money away from our schools or scholarships away from our students, we should ask millionaires to give up their tax break,” Obama said. “It’s not a matter of punishing their success. It’s about promoting America’s success.”

He also further disarmed the Republicans with several proposals they can hardly object to: reduction of the corporate-income-tax rate, review and reduction of regulations, streamlining of government agencies, and even medical-malpractice reform. He promised to veto any legislation with earmarks, defying the Republicans to keep their pledge about eliminating them.

But all this came after Obama articulated his own agenda, emphasizing the need to keep America competitive against new rivals like China and India by fostering innovation, bolstering education and rebuilding infrastructure.

He succeeded in framing the debate about the size and role of government in terms of its objectives — long-term goals that are forgotten in the artificial hysteria about deficits.

And he threw down the gantlet on health-care reform and Republicans’ show-trial efforts to repeal it. Obama said he’s open to suggestions for improvement, but he’s not going back. “So I say to this chamber tonight: Instead of re-fighting the battles of the last two years, let’s fix what needs fixing and let’s move forward,” he said.

Delivering the Republican response is becoming the equivalent of an athlete appearing on the cover of Sports Illustrated — a curse that can mark the end of a rising star’s career. Louisiana Gov. Bobby Jindal saw his star permanently dimmed when he gave the response to Obama’s first address to Congress in 2009. Paul Ryan also proved himself not ready for prime time.

Part of the problem is that these speeches are not really responses but set pieces that often ignore what was said by the president just minutes before. Ryan, for instance, was worried that “on its current path,” the national debt “will soon eclipse our entire economy, and grow to catastrophic levels in the years ahead.”

The administration has always said deficits will not continue to grow at the current rate, and Obama had just outlined how the gap was going to be reined in, so that Ryan’s fear-mongering hyperbole was as empty as the room he was sitting in.

But perhaps this role should just be seen for what it is: a sacrificial lamb put forward in the knowledge that a mere politician cannot compete with a president exercising his constitutional function. Maybe new House Speaker John Boehner, looking pleased as punch to be sitting next to Vice President Joe Biden behind Obama during the speech, has found the way to keep his troops in line.