Obama outlined a plan that includes tax cuts for the middle class and extending business tax cuts, but did not say in his speech how much the plan would cost. However, the White House has placed total spending at $447 billion.

He did say his plan would make spending cuts and make "modest adjustments" to Medicare and Medicaid, and reforming the tax code. He also took a line from Republicans by saying the U.S. needs to "reform Medicare to strengthen it."

Among other things, the plan calls for $175 billion to cut the employee payroll tax in half next year; $70 billion for cutting the employer payroll tax in half; $140 billion for a new national infrastructure bank and immediate spending on road and bridge repair; and $62 billion to extend unemployment insurance.

—This post was updated at 7:46 p.m.