Exclusive: President Obama Says Terry Jones' Plan to Burn Korans Is 'A Destructive Act'

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"I have not seen a single new idea out of the Republicans," he said. "I have not seen a single proposal that any credible economist would say, 'boy, this is really going to jumpstart the economy. This is going to encourage innovation. This is going to make us more competitive.'"

The challenge for the economy is to grow the middle class through skills training to meet the demands of a technologically complex society, a focus on exports and investment in clean energy, he added.

"When the chairman of the Congressional committee was asked 'what do you plan to do if you guys re-take Congress,' he said, 'We're going to go back to the exact same policies that were in place before Obama came into office. Well," Obama said, "we lost 4 million jobs in the six months before I came into office."

'Daddy's Making the Best Decisions That He Can'

His administration was successful in preventing the American economy from sliding into a depression, he said. The economy is growing – although he conceded that it was growing too slowly.

Given America's discontent, the president acknowledged Democratic incumbents could be in trouble in November.

"If the election is a referendum on, are people satisfied about the economy as it currently is, then we're not going to do well. Because I think everybody feels like this economy needs to do better than it's been doing," he said.

The president also talked about whether his daughters, Sasha and Malia, were aware of just how turbulent things were.

"People are very gracious to them," he said. "It's not like somebody's going up and saying 'You know, I think your Dad is a bum,'" he said, laughing. "That has not yet happened to them. I think people understand that … kids are off-limits on these issues."

But, he said, he didn't believe they were aware that "we're going through a tough time."

"They know that we're involved in two wars … They know that we had a big oil spill in the Gulf. And so, we talk about those issues. And what I try to explain to them is that the issues that we're dealing with are really tough. Daddy's making the best decisions that he can to help the most people in the country."

ABC News' Huma Khan and Matthew Jaffe contributed to this story.

Click here to return to the "Good Morning America" website.

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