Obama Meet the Press Interview: Full Transcript, Quotes, Video

President Barack Obama had a sit-down interview with Meet the Press host David Gregory on Saturday afternoon in the White House, an interview which aired Sunday morning on NBC.

In the interview, Obama spoke at length on the fiscal cliff — outlining both his strategy in this debate (tax the rich, help the middle class keep running as the engine of the economy) and his economic principles. He also spoke on gun control — giving hints at how Democrats would tackle the issue in the post-Newtown environment — as well as his cabinet fluctuations, the on-going Benghazi situation, and gave insights on how he wants to drive his second term.

[Read the full analysis here]

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Here are key quotes from the exchange.

DAVID GREGORY: "If you go over the cliff, what's the impact in the markets?" ...

OBAMA: "[O]bviously I think business and investors are going to feel more negative about the economy next year. If you look at projections of 2013, people generally felt that the economy would continue to grow, unemployment would continue to tick down, housing would continue to improve. But what's been holding us back is the dysfunction here in Washington. And if people start seeing that on January 1st this problem still hasn't been solved, that we haven't seen the kind of deficit reduction that we could have had had the Republicans been willing to take the deal that I gave them, if they say that people's taxes have gone up, which means consumer spending is going to be depressed, then obviously that's going to have an adverse reaction in the markets." ...

GREGORY: "How accountable are you for the fact that Washington can't get anything done and that we are at this deadline again? ... You've had a tough go with Congress."

OBAMA : "[A]t a certain point, if folks can't say 'yes' to good offers, then I also have an obligation to the American people to make sure that the entire burden of deficit reduction doesn't fall on seniors who are relying on Medicare. ... The offers that I've made to them have been so fair that a lot of Democrats get mad at me. ... I offered to make some significant changes to our entitlement programs ... They [Republicans] say that their biggest priority is making sure that we deal with the deficit in a serious way. But the way they're behaving is that their only priority is making sure that tax breaks for the wealthiest Americans are protected. That seems to be their only overriding, unifying theme. ...

"Democrats and Republicans both say they don't want taxes to go up on middle class families. ... If we can get that done, that takes a big bite out of the fiscal cliff. It avoids the worst outcomes. And we're then going to have some tough negotiations in terms of how we continue to reduce the deficit, grow the economy, create jobs." ...

GREGORY: "Would you commit to that first year of your second term getting significant [entitlement] reform done?" ...

OBAMA: "David, I want to be very clear. You are not only going to cut your way to prosperity. One of the fallacies I think that has been promoted is this notion that deficit reduction is only a matter of cutting programs that are really important to seniors, students and so forth. That has to be part of the mix, but what I ran on and what the American people elected me to do was to put forward a balanced approach. To make sure that there's shared sacrifice. ... And it is very difficult for me to say to a senior citizen or a student or a mom with a disabled kid, 'You are going to have to do with less but we're not going to ask millionaires and billionaires to do more.'" ...

GREGORY: "So what is your single priority of the second term? What is the equivalent to health care?"

OBAMA : "I've said that fixing our broken immigration system is a top priority. I will introduce legislation in the first year to get that done. ... The second thing that we've got to do is to stabilize the economy and make sure it's growing. Part of that is deficit reduction. Part of it is also making sure that we're investing, for example, in rebuilding our infrastructure, which is broken. And if we are putting people back to work rebuilding our roads, our bridges, our schools, in part paying for it by some of these broader long-term deficit reduction measures that need to take place that will grow the economy at the same time as we're also setting our path for long-term fiscal stability.

"Number three: We've got a huge opportunity around energy. We are producing more energy and America can become an energy exporter. How do we do that in a way that also deals with some of the environmental challenges that we have at the same time? So that's going to be a third thing. But the most immediate thing I've got to do starting on January 1st, if Congress doesn't act before the end of the year, is make sure that taxes are not going up on middle class families. Because it is going to be very hard for the economy to sustain its current growth trends, if suddenly we have a huge bite taken out of the average American's paycheck."

GREGORY: "Those are four huge things and you didn't mention ... new gun regulations. ... Do you have the stomach for the political fight for new gun control laws?"

OBAMA: "David, I think anybody who was up in Newtown ... understands that something fundamental in America has to change. And all of us have to do some soul searching, including me as president, that we allow a situation in which 20 precious small children are getting gunned down in a classroom. And I've been very clear that an assault rifle ban, banning these high capacity clips, background checks -- that there are a set of issues that I have historically supported and will continue to support. ...

"[S]o the question is: are we going to be able to have a national conversation and move something through Congress? I'd like to get it done in the first year. I will put forward a very specific proposal based on the recommendations that Joe Biden's task force is putting together as we speak. And so this is not something that I will be putting off. ... And, yes, it's going to be hard."

GREGORY: "Do we have an armed guard at every school in the country?"

OBAMA: "I am not going to prejudge the recommendations that are given to me. I am skeptical that the only answer is putting more guns in schools."

GREGORY: "do you feel like you let your friend Susan Rice hang out there to dry a little bit?"

OBAMA: "No. ... Why she was targeted individually, for the kind of attacks that she was subjected to, ... was puzzling to me." ...

GREGORY: "Former Senator Chuck Hagel has come under criticism for some comments he's made including about a former ambassador nominee during the Clinton years that being gay was an inhibiting factor to being gay to do an effective job. Is there anything about Chuck Hagel's record or statements that's disqualifying to you, should you nominate him to run the Defense Department?" ...

OBAMA: "Not that I see. I've served with Chuck Hagel. I know him. He is a patriot. He is somebody who has done extraordinary work both in the United States Senate. Somebody who served this country with valor in Vietnam. And is somebody who's currently serving on my intelligence advisory board and doing an outstanding job.

"So I haven't made a decision on this. With respect to the particular comment that you quoted, he apologized for it. And I think it's a testimony to what has been a positive change over the last decade in terms of people's attitudes about gays and lesbians serving our country. And that's something that I'm very proud to have led." ...

OBAMA, on a cliff deal: "I remain optimistic, I'm just a congenital optimist, that eventually people kind of see the light. Winston Churchill used to say that we Americans, we try every other option before we finally do the right thing. ... And I think that that's true for Congress as well. And I think it's also important for Americans to remember that politics has always been messy. People have been asking me a lot about the film 'Lincoln' and -- "

GREGORY: "Is this your Lincoln moment?"

OBAMA : "Well, no. Look, A, I never compare myself to Lincoln and, B, obviously the magnitude of the issues are quite different from the Civil War and slavery. The point, though, is democracy's always been messy. And we're a big, diverse country that is constantly sort of arguing about all kinds of stuff. But eventually we do the right thing. ... So one way or another, we'll get through this. Do I wish that things were more orderly in Washington and rational and people listened to the best arguments and compromised and operated in a more thoughtful and organized fashion? Absolutely. But when you look at history, that's been the exception rather than the norm."