Recently elected Virginia Gov. Tim Kaine, who delivered the Democratic response, meanwhile, chided the administration for its post-Hurricane Katrina recovery effort to its continued struggle to establish security in Iraq.
During his address to a joint session of Congress, the president touted advances in democracy in Afghanistan and Iraq, but said elections are only the beginning of reform in the Middle East.
"Raising up a democracy requires the rule of law, protection of minorities, and strong, accountable institutions that last longer than a single vote," he said, urging Egyptian and Palestinians to clamp down on radicalism after their recent elections.
Mr. Bush also called for an end to tyranny in the world, saying the United States was unaware of the threat dictatorships posed when the terrorists attacked on Sept. 11, 2001.
"Democracies replace resentment with hope, respect the rights of their citizens and their neighbors, and join the fight against terror," he said. "Every step toward freedom in the world makes our country safer, and so we will act boldly in freedom's cause."
President Bush brought up the National Security Agency's recently uncovered warrantless wiretapping program, which is the subject of upcoming hearings in the Senate.
He defended the program, saying it "remains essential to the security of America. If there are people inside our country who are talking with al-Qaida, we want to know about it because we will not sit back and wait to be hit again."
The president urged renewal of the USA Patriot Act, which Congress temporarily extended beyond its expiration date at the end of 2005, saying the law is essential to the war on terrorism.
He also mentioned the recovery effort in the Gulf Coast region hit by Hurricane Katrina last year. The federal government has allotted $85 billion, but he said the government must also address the root causes of the problems in the region such as education and job creation.
Mr. Bush urged congressional action in other areas of the domestic front, including making tax cuts permanent and creating a bipartisan commission to examine the impact of massive Baby Boom retirements on Social Security, Medicare, and Medicaid.
Kaine, speaking from Richmond, criticized the call to make tax cuts permanent, saying the administration has failed to manage a "staggering national debt. Over the past five years, we've gone from huge surpluses to massive deficits. No parent makes their child pay the mortgage. Why should we allow this administration to pass down the bill for its reckless spending to our children and grandchildren?"
In addition, the governor said the Bush administration's education reform law, No Child Left Behind, is "wreaking havoc on local school districts across the nation" because of a lack of federal funding.
In both cases, Kaine said, the administration should have followed the states' lead in finding solutions in a bipartisan manner.
The president, in his speech, urged a policy on immigration that would secure borders and establish a "rational, humane guest worker program that rejects amnesty, allows temporary jobs for people who seek them legally, and reduces smuggling and crime at the border."
Kaine's retort was that a lack of federal policy on immigration has led to a "confusing patchwork of state and local efforts."
"The administration is falling behind in other critical areas; preserving our environment, keeping our workplaces safe, protecting family farms, keeping jobs in America," Kaine continued. "Our communities are left to deal with the challenges and consequences of those failures without a reliable federal partner."
He said the divisiveness in Washington should be replaced by Democratic-led reform efforts to "to restore honesty and openness to our government."
On energy policy, President Bush said, "America is addicted to oil, which is often imported from unstable parts of the world."
He proposed a 22 percent increase in the Energy Department's research into forms of alternative energy, including zero-emission coal-fired plants, solar and wind technologies, and nuclear energy. He also asked for additional funding for research on hybrid, electric and hydrogen-powered automobiles, and ethanol production.
Keeping America competitive includes encouraging math and science learning, Mr. Bush said. He suggested doubling federal funding in physical sciences, and making permanent tax incentives for businesses to invest in technology.
In addition, he urged the use of technology to streamline health care costs and called for new funding for states for AIDS medicine.