Obama is Obama again.

Before his State of the Union message, Democrats worried and Republicans hoped that he had lost the plot of his presidency. But he found the way forward without walking away from principle or retreating to triangulation. Watch the polls in the next few days. Obama connected with the American people—and once he follows through, the Party of No will discover a discomfiting fact about timing: They peaked a year too soon.

No, Obama didn’t do a Clinton. He didn’t do a Carter either, threatening a recovering economy—and his presidency—with economic malaise brought on by premature spending cuts. Instead Obama became the first president since John Kennedy to explicitly defend deficits in a downturn. He was confident, at times defiant, as he advanced his agenda. With a gleam in his eye, he even dared to utter the word that dare not speak its name—"stimulus." Confounding expectations, he said "climate change," too. As the Right’s feathers ruffled, he clipped their wings with the "common sense" response that even those who doubt the science of global warming ought to agree to act now, not only because the science is, well, scientific, but because the economics make sense, too.

He was in command of the House chamber, with a humor, ease, and disarming wit we haven’t seen at the presidential podium since Reagan and Kennedy. He thought mentioning tax cuts would get some applause from the Republicans; instead they showed the country their rigid character, sitting like frozen figures in Madame Tussaud’s. (They did rise to their feet to applaud offshore drilling; Big Oil was watching.)

The president smiled suggesting that if "anyone from either party," has a better approach on health care, "let me know, let me know. I’m eager to see it." The remark inspired laughter because the Republicans don’t have any ideas beyond token gifts for the insurance industry. And over and over, he laid responsibility for "the lost decade" and the mess he inherited at the doorstep of George W. Bush and his Republican accomplices in Congress—without ever mentioning Bush’s name. (Reagan did exactly the same to Carter and the Democrats; read his State of the Union speeches of the early 1980s.)

This was not a panicked president tacking rightward, the stuff of so much pre-speech commentary. Obama was confident, resolute, and unapologetically progressive. (Finally, finally he called for repeal of "don’t ask, don’t tell.") Of course, health reform couldn’t be the centerpiece of the  speech. But he reaffirmed, not by the length but by the strength of his words, that it is central to his presidency to "bring down premiums ... [and] cover the uninsured." This was where he vowed: "I will not walk away."

I believe Obama has a plan to see reform through—not with Republican help that will never come, but by sorting through the messy parochialism of House and Senate Democrats. Obama was tough on the Senate on other issues. But on health care, it’s the House that will have to move, passing the Senate bill and then seeing it amended in the filibuster-free zone of reconciliation. Members of Congress don’t like to lose elections, so I expect post-Massachusetts hysteria to be set aside and this landmark achievement to be signed into law with surprising speed.

Contrary to the president’s hope, Republican tempers will not "cool." Nor are the Republicans likely to cooperate on Obama’s "No. 1 focus this year"—job creation. In the end, they may grudgingly vote for some of the tax cuts that they refused to applaud. But by their silence, the Republicans, the opportunistic merchants of an insecure populism, were exposed as the protectors of Wall Street at its worst. By contrast, in the State of the Union the president put himself and the Democrats on the people’s side and he did so deftly. He fights, but with a rapier not a hammer. And in Tampa the next day, he made no apologies for a genuinely populist tone—and pledged again, and again, never to stop "fighting for you."

Maybe he should have delivered this year’s State of the Union speech to Congress last year, focusing on job creation and Wall Street abuses as well as health care. The stimulus, he had been advised, would trigger recovery; but his chrome-headed economists, who didn’t have a clue about the gathering political storm, were no substitute for presidential empathy.

It was fun to see the Republicans inadvertently assist Obama. The House Republican leader, the preternaturally tanned John Boehner, unmasked himself when he sat smirking with his Gingrichian side-kick Eric Cantor as the president demanded "tough, new, common-sense rules of the road" to punish abuses in financial markets. Then Virginia Gov. Bob McDonnell pitched in with a GOP response that rewarmed old chestnuts about "over-regulating" and the "limited role of government at every level"—code for the laissez-faire policies that brought economic collapse.

How appealing is this lumpy ideological porridge from the last century? A Democracy Corps focus group of 50 Republican-leaning voters showed major gains on the issues as Obama spoke Wednesday night. There was one caveat: They now want to see this president deliver on jobs and health reform. The coming cascade of post-speech polling will confirm the trend.

We may also be on the verge of other positive trends—a full-fledged recovery with sufficient jobs growth to be visible to voters as early as this summer. On the health bill, watch Obama cajole, negotiate, and make sure his fellow Democrats don't "run for the hills." On reining in Wall Street, watch the Republicans do the bidding of the boardrooms.

The president has regained the initiative by rejecting the counsels of timidity. "We are not quitters," he said. It’s far from a done deal, but the State of the Union was a powerful new beginning for the recently and too readily dismissed prospect of a transformative presidency and a new progressive era. Yes, he can.