Sounding familiar Republican themes, the newly elected governor called President Barack Obama's healthcare reform plans too expensive and said the government can't pay for Washington Democrats' agenda.
"What government should not do is pile on more taxation, regulation and litigation that kill jobs and hurt the middle class," McDonnell said.
He called for tax cuts and said the administration has not done enough to create jobs and has contributed to an "unsustainable" $14 trillion deficit, amounting to more than $100,000 per American household.
"One in 10 American workers is unemployed," McDonnell said, speaking in the House of Delegates chamber of the State Capitol of Virginia. "That is unacceptable.
"In the past year, over 3 million Americans have lost their jobs, yet the Democratic Congress continues deficit spending, adding to the bureaucracy and increasing the national debt on our children and grandchildren."
McDonnell invoked the advice of Thomas Jefferson, who designed the capitol, to maintain a "wise and frugal government" and called on lawmakers to restore the "proper, limited role of government at every level."
"Today, the federal government is simply trying to do too much," he said.
Turning to the stimulus bill, he said, "Last year, we were told that massive new federal spending would create more jobs 'immediately' and hold unemployment below 8 percent."
McDonnell sought some common ground. He praised Obama's planned three-year freeze on discretionary spending as "a laudable step, but a small one." And he said he agreed with the president's expanding charter schools and sending more troops to Afghanistan.
On healthcare reform, Obama's top priority during his first year, McDonnell said Americans want reform but "do not want to turn over the best medical care system in the world to the federal government."
He called on congressional lawmakers to consider Republican healthcare reform ideas such as allowing purchase of insurance across state lines and imposing tort reform to limit "frivolous" lawsuits. Reform, McDonnell said, could be achieved without shifting Medicaid costs to states, cutting Medicare or raising taxes.