In a White House news conference focused largely on the sour economy and upcoming election, President Barack Obama insisted that recovery from the deepest recession in decades is happening but conceded the "progress has been painfully slow."
He said he understands that many voters in November's elections may blame the weak recovery on him.
"For all the progress we've made, we're not there yet. And that means people are frustrated and why people are angry," he said at the White House in his first formal news conference since May. "Because I am president, and the Democrats have control the House and Senate, it's understandable that people are saying, 'What have you done?"'
Obama repeated his insistence that Republicans drop stalling tactics on a bill to help small businesses when Congress returns next week from its summer recess.
Facing the possibility of a GOP blowout in November, Obama insisted again that Bush-era tax cuts be extended for individuals earning less than $200,000 a year and joint filers earning under $250,000. All the tax cuts are due to expire at the end of this year unless Congress acts.
Obama said Congress shouldn't delay extending the middle-class tax cuts any longer.
"Why hold it up? Why hold the middle class hostage," he said.
He said extending tax cuts for the wealthiest Americans "is a bad idea."
Obama over the past week has outlined a trio of job-creation ideas designed to prod the economy: $50 billion for roads, rail lines and other infrastructure spending, a permanent research and development credit and upfront 100 percent business write-offs through 2012.
With polls suggesting that voters have decided — rightly or wrongly — that his $814 billion stimulus plan last year was less than a success, the White House has been steering clear of portraying these new items as another stimulus.
'Stimulus' a dirty word?
Yet when he was asked directly whether the unpopularity of the first stimulus was why White House officials weren't using that word this time, Obama said:
"I have no problem with people saying the president is trying to stimulate growth and jobs. There's no doubt that everything we've been trying to do ... is designed to stimulate growth and jobs in the entire economy." He said he hoped Republicans had the same goal.
Seeking to rally his struggling party, Obama cast Democrats as warriors for the hard-pressed middle class and Republicans as protectors of millionaires and special interests.
Asked how he had changed Washington, Obama said the dreadful economy made it hard to demonstrate real progress.
"I think that's fair. I'm as frustrated as anybody by it," Obama said.
Obama opened the session with a statement on the economy and also announced that he has chosen one of his longtime economic advisers, Austan Goolsbee, to be the chairman of his Council of Economic Advisers.
Goolsbee, 41, a University of Chicago professor of economics, was Obama's senior economic adviser during the 2008 presidential campaign. He already has been confirmed to the council by the Senate and will need no further confirmation. He replaces Christina Romer, who left the administration last week to return to teaching at the University of California, Berkeley.
He said Romer "... is brilliant, she is dedicated, she is part of the team that helped save this country from a depression."
Obama also spoke passionately about the mosque and Quran controversies that are threatening to politicize this year's commemoration of the 9/11 terror attacks.
Obama appealed to the American people to stand by the nation's belief in religious tolerance.
His comments come as a Florida pastor threatened to burn the Muslim holy book on Saturday. A debate is also raging over whether an Islamic center should be built near ground zero in New York City.
Declining to mention Rev. Terry Jones by name, Obama referred to him as "the individual down in Florida."
Obama said people must remember that the country's enemy is not Islam but al-Qaida and other extremist groups. He said Americans can't turn on each other and let their fears lead to divisions.
Obama said he always admired former President George W. Bush for being "crystal clear" that America was never at war with Islam.
He said he will do all he can "to remind the American people that we are one nation under God. And we might call that God different names, but we remain one nation."
He added that he "relies heavily on my Christian faith."
"If you could build a church on a site, you could build a synagogue on a site, you could build a Hindu temple on a site, then you should be able to build a mosque on a site," the president contended.
He counseled respect and inclusion for Muslims in the United States. He said, "They are Americans. We don't differentiate between 'them' and 'us.' It's just us."
There are Muslims serving in the armed forces, Obama said. "They are Americans. We honor their service."
As for continued terror threats against America, nine years after 9/11, Obama said, "There is always going to be the potential for an individual or a small group of individuals, if they are willing to die, to kill other people. ... That threat is there, and it's important, I think, for the American people to understand that. And not to live in fear; it's just a reality of today's world that there are going to be threats out there."