(CBS)  President Obama is currently on a trade mission in India following a long flight, and an even longer week which saw him lose his Democratic majority in the House of Representatives and nearly lose it in the Senate.

Although his name wasn’t on the ballot, his performance in office was certainly a factor in the outcome.

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Late on Thursday afternoon, two years to the date after his election as the 44th president, “60 Minutes” correspondent Steve Kroft sat down with him in the Oval Office – and the mood was different.

Kroft and Obama talked about Tuesday’s vote, the economy and where he goes from here.

60 Minutes Overtime: The Full Interview

Steve Kroft: The Republicans have said that this was a referendum on you and the Democratic Party. Do you agree with that?

President Obama: I think first and foremost, it was a referendum on the economy. And the party in power was held responsible for an economy that is still underperforming and where a lot of folks are still hurting.

Kroft: At your news conference, you seemed unwilling to accept the idea that this was a rejection in any way of your agenda. And your policies. Is this a defeat, a reflection on your leadership?

Obama: I think that what happened over the course of two years was that we had to take a series of big, emergency steps quickly. And most of them in the first six months of my administration. Each of them had a big price tag. And people looked at that and they said, “Boy, this feels as if there’s a huge expansion of government.”

Kroft: Well, it was a huge expansion of government.

Obama: What I didn’t effectively, I think, drive home, is that we were taking these steps not because of some theory that we wanted to expand government. It was because we had an emergency situation and we wanted to make sure the economy didn’t go off a cliff. I think the Republicans were able to paint my governing philosophy as a classic, traditional, big government liberal. And that’s not something that the American people want.

Kroft: The Republicans say the voters sent you a very clear message. That they want a smaller, less costly, more accountable government. Is that the message that you received?

Obama: I think that the first and foremost, they want jobs and economic growth in this country.

Kroft: Are you saying, then, that this small– the idea of smaller, less costly, more accountable government was not what you think the voters were saying?

Obama: No, no, no. There is no doubt that folks are concerned about debt and deficits. I think that is absolutely a priority. And by the way that’s a concern that I had before I was even sworn in.

Kroft: You lost a lot of your base on Tuesday – a lot of the people that helped elect you two years ago voted for Republicans. Women, senior citizens, independents. Young people and African Americans did not turn out in large numbers. How do you explain that?

Obama: Well, as I said, I think that folks are frustrated with what they’ve seen over the last two years. You know, one of the challenges we had was that we’d lost four million jobs in the six months before I was sworn in. We lost 750,000 jobs the month I was sworn in; 600,000 the month after that; 600,000 the month after that. So, what you had was the economy continuing to get worse in the first several months of my Administration, before any of our economic policies had a chance to be put into place. Appropriately, I’m held accountable for that.

Kroft: You ran as somebody who was gonna come to Washington and change it. And in the end– as some of your predecessors, it ended up changing you.

Obama: You know, I–

Kroft: To a certain extent.

Obama: Yeah. I’m not…

Kroft: You haven’t given up?

Obama: Exactly. I think it’s fair to say it hasn’t changed me in terms of my ideals. But I think that in terms of how I operated on a day-to-day basis, when you’ve got a series of choices to make I think that there are times where we said let’s just get it done instead of worrying about how we’re getting it done. And I think that’s a problem. I’m paying a political price for that.

Kroft: Well, to a certain extent the Tea Party and some of the Republicans ran on the same message or much of the same message that you ran on two years ago. Which is, “We’re gonna change Washington.” And now, you are Washington.

Obama: That’s one of the dangers of assuming power. And you know, when you’re campaigning, you, I think you’re liberated to say things without thinking about, “Okay, how am I gonna actually practically implement this.”

Kroft: Do you think you were naïve?

Obama: No, I don’t think I was naïve. I just think that these things are hard to do. You know, this is a big country. And democracy is an inherently messy business. And Congress is an institution that has a whole lot of traditions, some of ’em that aren’t, you know, all that healthy. And there are a lot of special interests who’ve got a lot of power.

Obama: It’s a hard, long slog to push up against that. But I think you make a good point, Steve, which is that you now have a lot of Republicans who ran as outsiders, who are coming in. And my hope is that we may be in a position now where the two sides meet and agree on some things that need to be changed.

The president is talking about is earmark – billions of dollars in political pork – dispensed each year by congressional leadership.

The Tea Party and conservative Republicans want to end the practice and President Obama is now ready to help them, even though he tolerated earmarks to pass key legislation. He says it was just one of his regrets.

Kroft: Are there things that you wish you could do over? Pull back?

Obama: I think there are things every day that I think about doing better. I mean, I think that one of the areas that a lot of folks have focused on, obviously, is the health care bill. Because after we took a whole series of these emergency measures, to save the economy, the stimulus, the steps to shore up the banking system, the auto bailout. I think there were some that argued, “Well, you should just stop and let people digest all these changes. And so, you shouldn’t take on something as big as health care.” And I’ll be honest with you, Steve, at the time, we knew that it probably wasn’t great politics.

Kroft: You were told that by your aides.

Obama: Absolutely. And the reason is there’s a reason why our health care system hasn’t been reformed over the last several decades. Why every president talks about it and it never happens. Because it’s hard. It’s a huge, big complicated system. I made the decision to go ahead and do it and it proved as costly politically as we expected. Probably actually a little more costly than we expected, politically.

Kroft: In what ways?

Obama: Well, partly because I couldn’t get the kind of cooperation from Republicans that I had hoped for. We thought that if we shaped a bill that wasn’t that different from bills that had previously been introduced by Republicans, including a Republican governor in Massachusetts who’s now running for president. That we would be able to find some common ground there. And we just couldn’t. And that was costly partly because it created the kind of partisanship and bickering that really turns people off.

Kroft: You’ve mentioned a couple of times the emergency that you faced when you came into office. And you’ve mentioned continually the unemployment problem. And the economy. This emergency, is it over?

Obama: Not for the people who are out of work. I think that the way to think about it is the dangers of a second big recession are now much reduced. The danger of us tipping into a Great Depression, I think most economists would say, is not there on the horizon. What is a danger is that we stay stuck in a new normal where unemployment rates stay high. People who have jobs see their incomes go up. Businesses make big profits. But they’ve learned to do more with less. And so they don’t hire. And as a consequence, we keep on seeing growth that is just too slow to bring back the eight million jobs that were lost. That is a danger. So that’s something that I’ve spent a lot of time thinking about.

Kroft: Do you get discouraged? Are you discouraged now?

Obama: I do get discouraged, I mean, there are times where I thought the economy would, had gotten better by now. One of the things I think you understand as president is you’re held responsible for everything. But you don’t always have control of everything. Especially an economy this big. There are limited tools to encourage the kind of job growth that we need. I am constantly reminded that we have been through worse times than these, and we’ve always come out on top. And I’m positive that the same thing is gonna happen this time.

Kroft: You spent nearly a trillion dollars on the stimulus package. Short term interest rates are zero, practically zero. And still the unemployment rate is 9.6 percent. What can you do to create jobs that hasn’t already been done?

Obama: Some of this is going to be just a matter of the economy healing. There are some things we can do to accelerate growth. We’ve got a couple of trillion dollars’ worth of infrastructure improvements that need to be made around the country. I mean, there are construction crews all across the country that are dying for work. And companies that are willing to take a very small profit in order to get work done. And so, for us to say now’s the time for us to rebuild this country and equip ourselves for the 21st century, that’s something that could make a real difference.

Kroft: But the Republicans aren’t interested in spending on infrastructure right now. They don’t want stimulus programs.

Obama: Well, you know, again, historically, rebuilding our infrastructure is something that has garnered Democratic and Republican support. I want to have a conversation with them and see if that’s still the case.

Kroft: The political landscape has changed. How do you plan to govern? President Clinton found himself in a very, very similar circumstance. And he reacted by pivoting to the middle. And was successful at it. Is that what you’re gonna do?

Kroft: You have to, don’t you?

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Obama: What I’m gonna do is I’m gonna reach out to Republicans and I’m gonna say, “What can we work on together?”

Kroft: Haven’t you tried that?

Obama: Well I have, but I’m gonna keep on trying.

But so far the Republicans aren’t showing much interest. No sooner than President Obama had left on his trip to Asia, Republican Congressman John Boehner, the next speaker of the House, questioned whether the president had gotten the voters’ message.

Boehner and Republican Senate Leader Mitch McConnell oppose any new spending, have vowed to repeal or decimate health care reform, and slash more than $100 billion from next year’s budget. Tea Party activists are demanding even deeper cuts.

Kroft: The Tea Party. According to the exit polls, four out of ten voters on Tuesday said they supported the movement. How seriously do you take the Tea Party and will it make the task of finding common ground with the Republican Party more difficult?

Obama: It’ll be interesting to see how it evolves. We have a long tradition in this country of a desire for limited government, of the suspicion of the federal government. Of the concern that government spends too much money. You know, I mean, that’s as American as apple pie. But you’re still confronted with a fact that the vast majority of the federal budget are things that people really think are important. Like Social Security and Medicare and defense.

Obama: And we’re gonna have to, you know, tackle some big issues like entitlements that, you know, when you listen to the Tea Party or you listen to Republican candidates, they promise we’re not gonna touch. Those are the choices that I think Republicans and Tea Party members are gonna have to confront in a serious way.

Kroft: You’ve, I would say, don’t have a very close relationship with Mr. McConnell, Senator McConnell and Congressman Boehner. What do you think of these guys?

Obama: Both John and Mitch are very smart. They’re capable. They have been able to I think organize the Republican caucus very effectively in opposition to a lot of the things that we tried to do over the last two years. And that takes real political skill. My assumption is that we’re gonna be able to work together. And whenever we’ve had conversations here at the White House or over on Capitol Hill, they’ve always been cordial.

Kroft: It’s just in the newspapers that they’ve been…less than cordial.

Obama: Look, during election season, I think the rhetoric flies. And by the way, I’ve been guilty of that. It’s not just them. Part of my promise to the American people when I was elected was to maintain the kind of tone that says we can disagree without being disagreeable. And I think over the course of two years, there have been times where I’ve slipped on that commitment.

President Obama’s next big challenge working with the Republicans will begin in two weeks when he meets with the congressional leadership. The Bush-era tax cuts automatically expire at the end of the year unless Congress renews them.

The president wants to keep the tax breaks for middle class families earning less than $250,000 a year. He would let them expire for wealthier taxpayers. The Republicans want the tax cuts extended for everyone to keep the economy moving.

Kroft: Are you ready to compromise on the Bush tax cuts?

Obama: Well, I think we’re gonna have to have a serious conversation about it. Here’s an example where I’d like to think we could at least settle on those things we agree on. I think both Democrats and Republicans agree that for people making $250,000 a year or less, the last thing we want right now is to see their taxes go up. Not only would it be bad for them, but it’d be bad for the economy as a whole. For folks who are making more than $250,000 a year, you and me, Steve, you know, the question is, can we afford to borrow $700 billion.

Kroft: That’s what it is?

Obama: That’s how much it would cost, over the course of ten years. To give us an extra tax break. Look, sometimes I think this debate gets framed as if I think rich people, folks who are doing well, should be punished. Part of what America’s all about is going out there and getting’ rich. And, you know, if you make a good product, you make, provide a good service, God bless you, I want you to do well. And then you can plow that money back into creating jobs. And building your businesses. That’s terrific. What I don’t think makes sense is for us to borrow $700 billion to pay for that. And we don’t have the money. I mean, everybody’s already talking about our debt and our deficit, why would we want to add to it? Now, having said all that…

Kroft: The Republicans want everybody to get it.

Obama: I understand the Republicans have a different view. And so, we are going to have to have a negotiation. And I am open to, you know, finding a way in which, you know, they can meet their, principles and I can meet mine. But in order to do that, I think we do have to answer the question of how we pay for it.

Kroft: Congressman Boehner has offered you a compromise back in September. He suggested extending the tax break for the wealthiest for two more years. And rolling back discretionary government spending to levels before the bailout in 2008. Is that something that you could live with?

Obama: I think that when we start getting specific like that, there’s a basis for a conversation. I think that what that means is that, you know, we can look at what the budget projections are. We can think about what the economy needs right now. Given that it’s still weak. And hopefully, we can agree on a set of facts that leads to a compromise.

Kroft: Do you want to make a counter proposal to him right now?

Obama: I think I’ve already invited them over to the White House. And you know, there’re gonna be a bunch of discussions. But I think I think we can make progress on this. 

Kroft: The point of view of a lot of people is why would you want to tax or raise taxes on the people who have money to spend? Not necessarily the wealthiest people in America. You’re not talking about Goldman Sachs here. You’re talking about small business people who maybe make $250,000 a year. Why would you want to take that money back, when you’re looking to try and they’ve got money to spend to put it into the economy?

Obama: Well, the truth is that the way this thing works out, it’s folks who are millionaires and billionaires who get the biggest breaks. And it turns out that actually the people who are most likely to use that money and spend that money are actually people of more modest means and if what we’re concerned about is how we can grow the economy there are more efficient ways to re-circulate dollars out there and get people to spend.

Kroft: There is a perception out there that you’re anti business.

Obama: Well, I think there’s no doubt that the relationship with the business community over the course of the last two years at times has gotten strained. And so I think that we’ve got some repair work to do there. These were exceptional circumstances over the last two years. I think we have to make sure that people understand and business understand that my overarching philosophy is not one in which we have constantly increasing government intervention. Although I do think that some of the provisions we put in place to protect consumers, to correct, create a regulatory framework where we don’t have a repeat of the kinda crisis we had in the banking sector, those have to be preserved.

Kroft: One of the things that drives business crazy is this idea that they don’t know what’s going on. They have trouble planning, they don’t know what the tax rates going to be.

Obama: Right.

Kroft: They’re not convinced that things are getting better.

Obama: Right. There are two separate arguments here. I think a lot of businesses still don’t know what the economy is doing. There’s still a lot of uncertain data out there. And we’re still working through some big problems of the economy. The housing market is a huge headwind. Now, the second part of uncertainty, and this is the one that the Republicans focused a lot on during the campaign is, we’ve got a new health care law, we’ve got a new financial regulatory reform law, we don’t know what all these regulations coming out of various agencies might be, and so that’s making people hesitate.

Obama: And you know, I think that it is entirely legitimate that in the banking sector, let’s say it’s very important for us to write these rules, in collaboration with interested parties so that they can start knowing how things are going to work. When it comes to health care, we need to be consulting with the insurance industry, make sure they know how things are going to work.

Kroft: There is this feeling, particularly among people who are among your most ardent supporters, who feel a little disappointed that they think that they’ve lost your mojo. That you’ve lost your ability, that touch you had during the campaign, to inspire and lead. That everybody in Washington writes about this aloofness that you have. And I’m sure that drives you crazy.That you’ve let other people define you. That you haven’t sold your successes well enough.

Obama: I think that’s a fair argument. You know, I think that over the course of two years we were so busy and so focused on getting a bunch of stuff done that we stopped paying attention to the fact that we – yeah, leadership isn’t just legislation. That it’s a matter of persuading people. And giving them confidence and bringing them together. And setting a tone. We haven’t always been successful at that, and I take personal responsibility for that. And it’s something that I have to examine carefully as I go forward. I will say that when it comes to some of my supporters.

Obama: Part of it, I think, is the belief that if I just communicated things better, that I’d be able to persuade that half of the country that voted for John McCain that we were right and they were wrong. One of the things that I think is important for people to remember is that you know, this country doesn’t just agree with the New York Times editorial page. And, I can make some really good arguments defending the Democratic position. And there are gonna be some people who just don’t agree with me. And that’s okay.

One that has not been okay with a lot of people, has been his eagerness to spread his gospel to the far reaches of broadcast /cable universe. It seems like he has been almost everywhere: Leno and Letterman, MTV and Comedy Central, America’s Most Wanted and the View.

Some have found it demeaning and un-presidential.

Kroft: I don’t know if you saw this cartoon- [the cartoon showed a woman doing exercise in front of her TV, with the president portrayed as a TV fitness trainer.]

Obama: Let me take a look at it. (LAUGHTER) Yeah, in case people are wondering…

Kroft: “Body by Bam”…from The Daily News.

Obama: The challenge right now, and you know this better than I do, Steve, is that it used to be a president could call a press conference and the three major networks would come and he’d talk to ’em, and you pretty much reached everybody in America. And these days the closest I can get to that is being on 60 Minutes.

Obama: But there are a whole bunch of folks who watch The Daily Show¸ or watch The View. And so I’ve got to adapt the presidency to reach as many people as possible, in as many settings as possible so that they can hear directly from me. You know, but this is an example of where you know, on the one hand folks say, “Well, you know he’s a little too remote.” Then if I’m on The View, “Well, you know, he shouldn’t be, you know, on some daytime TV show. My attitude is if I’m reaching people, if I’m talkin’ to ’em, I’m willing to take the risks of overexposure on that front.

Kroft: You’re halfway through…just about halfway through your first term. What’s the most important thing you’ve learned about your two years here, about yourself, about the job?

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Obama: I think that I’ve learned that America is incredibly resilient. I think I’ve learned about myself that I’m pretty resilient too. You know, that I’ll get knocked down a couple of times. But whatever I’m goin’ through, it’s nothin’ like what families around the country are goin’ through. And if they are able to keep goin’ even when things don’t go the way they want, then I sure can as well.