Exclusive: President Barack and Michelle Obama Reflect on Tenure

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With Thanksgiving travelers up in arms over the Transportation Security Administration's controversial new pat-down procedures, President Barack Obama said the security screenings are justified to keep the nation safe.

"This is gonna be something that evolves. We are gonna have to work on it," Obama told Barbara Walters, indicating the need for new technologies. "I understand people's frustrations with it, but I also know that if there was an explosion in the air that killed a couple of hundred people...and it turned out that we could have prevented it possibly... that would be something that would be pretty upsetting to most of us -- including me."

After two tough years in office, President Obama and first lady Michelle Obama sat down with Walters for an exclusive interview and reflected on their tenures, and the many challenges they've faced. The interview covered a wide range of topics including the recent events in North Korea, a potential 2012 challenge from former Alaska Gov. Sarah Palin, the economy and their family life in the White House.

Obama on Midterm Election Night: 'I Think [Michelle] Went to Sleep'

Coming off the "shellacking" the Democrats took in the 2010 midterm elections, Michelle Obama told Walters she encouraged the president to roll up his sleeves and "get to work."

"I said, 'Let's, let's get to work. There is a lot to do.' ... I think for, for us, it's always the focus on what we need to get done, the work ahead," she said.

But the president's recollection of election night was slightly different. Obama told Walters that by the time the results came in, Michelle, whom he has called his "chief advisor," had already turned in for the night.

"Now, keep in mind that election night, I think she went to sleep," Obama remarked. "She goes to sleep early."

"I go to bed early. I can't stay awake for the returns... I gotta get up, work out. I figured...it was gonna be whatever it was gonna be the next day. So I did, I did go to sleep," she said with a laugh.

Despite Democratic losses, which many considered a referendum on the president, Michelle said she considers her husband's policies a success.

"It's a tough time. My understanding is that, number one, every president in history has lost Congress at the midterms. Maybe that's overstating it, but it's happened for every president in my lifetime. … It's the norm," she told Walters. "There is nothing that I would look at in this year… I wouldn't look at not giving this country health care…I wouldn't want to take back any of the investments that we have made in education…So I think from a policy perspective, he has done an outstanding job."

"She is a little biased," the President interjected.

President Obama Stands by Agenda, Policies

To those who say that the president squandered his political capital by pushing for health care when he should have focused on the economy, Obama defended his record.

"This notion that somehow you can only do one thing at once is simply not true. The fact is, is that we stabilized the financial system...we turned an economy that was contracting to one that was growing. We have added a million jobs over the last year to the economy," Obama told Walters. "I am absolutely confident that when we fully implemented health care, and we started to see those costs go down and we have seen people who don't have health insurance get health insurance, and we have seen families who have health insurance more secure and they are not being jerked around by arbitrary rules from their insurance companies, that that's gonna be a lasting legacy that I am extraordinarily proud of."

Walters also asked the president about his decision to lift certain trade and travel restrictions on Cuba, and if he would consider ending the Cuban trade embargo. The president said he is monitoring Cuba's reform effort, but progress must be made before the embargo is lifted.

"We haven't seen all the progress that they said they were going to engage in. So part of what we're doing right now is monitoring: have, in fact, all the political prisoners who they said were going to be released, have they been released?" Obama explained. "Step by step, we're exploring other ways that we can break the impasse. But my watchword is how do we assure freedom and dignity for the Cuban people? And if in fact Cuba's ready to turn a corner, I think they will find a welcome partner in the United States of America. But we're not there yet."

A Personal Look at Life in the White House

While the president has become hardened to the constant criticism on the left and the right, the nation's first kids are not immune to those critiques. For Malia, the Obamas' 12-year-old daughter, her father has come up in a classroom discussion of current events.

"There are issues of the day that come across the conversation. But I have to say that the school is very good about handling it. ...People are very considerate," Michelle Obama explained. "But [Malia] said, 'You know, Dad, no disrespect, but...that's what you do.' And she said, 'That doesn't have anything to do with me.' She separates [it] out."

For the most part, the Obamas said their daughters don't listen to the news or read the newspaper headlines; they prefer to just be kids.

"They are not watching cable TV," Obama said. "If they have got an option of watching the news or watching SpongeBob, I think it's pretty clear the choice that they are gonna make."

Despite living at 1600 Pennsylvania Ave., Malia and her 9-year-old sister Sasha have maintained as relatively normal a childhood as possible. Sasha still writes to Santa, the first lady said, and like other kids, eagerly awaits the arrival of the Tooth Fairy when she loses a tooth.

"There was a little dialogue that we had with Malia when Michelle forgot to… [Malia] signaled that the Tooth Fairy failed to come in," Obama said with a laugh. "And we came in and it was missing."

"Because we hadn't called the Tooth Fairy," Michelle Obama interjected.

"And then, we put the money in later," Obama explained. "And [Malia] said, 'You know, whether I believe in it or not, I sure like getting the money.'"

When asked by Walters what he does when he's under stress, Obama said along with exercise, it's spending time with the kids that keeps him grounded.

"When you're stressed, they are just -- they're funny, they're smart, they're happy," the president said.

"They rock you back into what's important," Michelle added.

"The most important things for me over the last two years, in terms of stress reduction, is the fact that if I'm here in Washington, I'm having dinner at 6:30, just about every night and sitting around that table, listening to them, and trying to answer their questions, that keeps my bearings," Obama said.

The Obamas on Prayer: 'Live Long and Strong'

Before dinner every night, the family says grace together, the Obamas said.

"It's interesting listening to the girls, what they pray for," the President explained. "They'll talk about family and thanking God for blessing us, but they'll always add a little twist: 'I hope we have a great Thanksgiving, I can't wait to see the cousins.' They used to pray for a dog, until we got a dog."

"But in the end we always say, 'we hope we live long and strong," Michelle said.

"Long and strong," the president echoed.

First Family Celebrates Thanksgiving

This Thanksgiving, the Obamas hosted a dinner at the White House for relatives and friends. Instead of the potluck-style dinners that were their tradition back in Chicago, the White House chef cooked.

"We don't require people to bring food to the White House. In fact, the chef and the staff would be insulted," the first lady said.

"Well also, the Secret Service would have to taste everything," the president added.

In the spirit of Thanksgiving, the Obamas and their guests volunteered at Martha's Table, an organization in Washington that feeds the poor. At a time when many Americans are struggling to even buy a turkey, the president said the best days for the nation are yet to come.

"I think the important thing for all of us to remember though is that, first of all, we have been through tougher times before as a country and we have always come out on top because we make adjustments, we persevere, we recognize those things that have to be fixed and we fix them.

"We have got a lot more work to do, but I am confident that if we make the investments… we need to make sure our kids are getting the best education...if we are investing in our infrastructure...We have got a lot more work to do, but I am confident that if we are investing in research and development that continues to make us an innovation leader for the future… that we are gonna do great. I am very, very confident that our best days are still ahead of us."

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