JIM LEHRER: President Obama held a televised news conference this morning at the White House. The East Room back-and-forth included questions about the economy, the Middle East, and religious tensions. NewsHour correspondent Kwame Holman reports.
KWAME HOLMAN: It was the first formal news conference since May, and, from start to finish, the session lasted an hour and 17 minutes. First up: a question about Mr. Obama's comment earlier this week that Democrats would suffer at the polls in November if the election was a referendum on the economy.
U.S. PRESIDENT BARACK OBAMA: What I said was that if it was just a referendum on whether we've made the kind of progress that we need to, then people around the country would say, "We're not there yet." If the election is about the policies that are going to move us forward versus the policies that will get us back into a mess, then I think the Democrats will do very well.
KWAME HOLMAN: One such policy is Mr. Obama's push to extend middle-class tax cuts, something he argued should garner bipartisan support.
BARACK OBAMA: Ninety-seven percent of Americans make less than $250,000 a year -- $250,000 a year or less. And I'm saying, we can give those families, 97 percent, permanent tax relief.
Now, that seems like a commonsense thing to do. And what I have got is the Republicans holding middle-class tax relief hostage because they're insisting we've got to give tax relief to millionaires and billionaires to the tune of about $100,000 per millionaire.
KWAME HOLMAN: On health care, the president was pressed about a government report showing health care costs on the rise, that despite the passage of legislation aimed at bending down the cost curve.
BARACK OBAMA: We didn't think that we were going to cover 30 million people for free, but that the long-term trend in terms of how much the average family is going to be paying for health insurance is going to be improved as a consequence of health care.
And -- and so our goal on health care is if we can get instead of health care costs going up 6 percent a year, it's going up at the level of inflation, maybe just slightly above inflation, we've made huge progress. And, by the way, that is the single most important thing we could do in terms of reducing our deficit.
KWAME HOLMAN: Mr. Obama also was asked about his campaign pledge to change how Washington operated.
BARACK OBAMA: If you're asking why haven't I been able to create a greater spirit of cooperation in Washington, you know, I think that's fair. I'm as frustrated as anybody by it.
KWAME HOLMAN: While the news conference dealt mainly with economic issues and domestic politics at the outset, reporters later turned to other subjects, including a renewed focus on the role of Islam in American society.
ANNE KORNBLUT, The Washington Post: Nine years after the September 11th attacks, why do you think it is that we are now seeing such an increase in suspicion and outright resentment of Islam, especially given that it has been one of your priorities to increase -- to improve relations with the Muslim world?
BARACK OBAMA: You know, I think that at a time when the country is anxious generally and going through a tough time, then, you know, fears can surface -- suspicions, divisions can surface in a society. And so I think that plays a role in it.
One of the things that I most admired about President Bush was, after 9/11, him being crystal clear about the fact that we were not at war with Islam. And I was so proud of the country rallying around that idea, that notion: that we are not going to be divided by religion. And we're not going to be divided by ethnicity.
KWAME HOLMAN: The president also fielded questions about his foreign policy agenda, including corruption in Afghanistan, closing the U.S. detention facility at Guantanamo Bay, and reinvigorated Middle East peace talks.
BARACK OBAMA: One of the goals, I think, that I have set for myself and for my team is to make sure that President Abbas and Prime Minister Netanyahu start thinking about how can they help the other succeed, as opposed to how do they figure out a way for the other to fail, because, if they're going to be successful in bringing about what they now agree is the best course of action for their people, the only way they're going to succeed is if they are seeing the world through the other person's eyes.
KWAME HOLMAN: The news conference ended with a question focused on two recent controversies: the building of an Islamic cultural center in Lower Manhattan and an obscure Florida pastor's threat to publicly burn the Koran on September 11.
BARACK OBAMA: There is no doubt that when someone goes out of their way to be provocative in ways that we know can inflame the passions of over a billion Muslims around the world at a time when we've got our troops in a lot of Muslim countries, that's a problem. And it has made life a lot more difficult for our men and women in uniform who already have a very difficult job.
With respect to the mosque in New York, you know, I think I have been pretty clear on my position here. And that is, is that this country stands for the proposition that all men and women are created equal, that they have certain inalienable rights. One of those inalienable rights is to practice their religion freely. And what that means is that if you could build a church on a site, you could build a synagogue on a site, if you could build a Hindu temple on a site, then you should be able to build a mosque on the site.
We've got millions of Muslim Americans, our fellow citizens, in this country. They're going to school with our kids. They're our neighbors. They're our friends. They're our co-workers. And, you know, when we start acting as if their religion is somehow offensive, what are we saying to them?
I have got Muslims who are fighting in Afghanistan in the uniform of the United States armed services. They're out there putting their lives on the line for us, and we've got to make sure that we are crystal clear, for our sakes and their sakes, they are Americans, and we honor their service.
And part of honoring their service is making sure that they understand that we don't differentiate between them and us. It's just us. And that is a principle that I think is -- is -- is going to be very important for us to -- to sustain. And I think tomorrow is an excellent time for us to -- to reflect on that.
KWAME HOLMAN: The president will deliver remarks at the Pentagon tomorrow to mark the ninth anniversary of the 9/11 attacks.