Social Security

Republicans have argued major changes are needed to save Medicare and Social Security so the trust funds that finance them don't run out of money in the long run. Obama wants to work within the current framework.

"I am open and eager to work with both parties, but just as is true when it comes to Medicare, I will reject proposals that slash benefits for current beneficiaries or to undermine the basic structure of the system," Obama said.

Obama said the nation's recent financial crisis proves the folly of plans by Romney and Ryan to allow workers to invest Social Security money in the stock market; he believes "there should be a floor that allows us to still live with dignity and respect. That's what Medicare is about, and that's what Social Security is about."

Health care reform

Obama defended the signature legislation of his presidency: "Whenever I hear people say there's a government takeover of health care, we've now seen over the last two years people who have health insurance who still are relying on that health insurance. But what we have been able to do is to start encouraging and incentivizing providers to think and act more effectively in how health care is delivered."

At the heart of reform is changing the model of medicine, he said, "shifting the medical profession away from a fee-for-service model where you get paid no matter what you do … [to] getting rewarded for doing the right thing and … instituting best practices."

As Obama talked health care, the door to the Oval Office burst open and daughters Malia, 14, and Sasha, 11, bounded in, followed by first lady Michelle Obama. After a month away from their dad, they were back from camp early. The president bolted from his chair by the fireplace to be engulfed by the girls. "Excuse me. I haven't seen my daughters," he said before grilling them about camp and getting a full report of the menu for their welcome home dinner.

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