Exclusive: President Obama Says Voter Anger, Frustration Key to Republican Victory in Massachusetts Senate

Jan. 20, 2010— -- President Obama warned Democrats in Congress today not to "jam" a health care reform bill through now that they've lost their commanding majority in the Senate, and said they must wait for newly elected Massachusetts Republican Scott Brown to be sworn into office.

The president also said the same voter anger that swept him into office in 2008 carried Brown into office on a stunning upset victory Tuesday night over heavily favored Democrat Martha Coakley.

Watch George Stephanopoulos' exclusive interview with President Obama today on "Nightline" and tomorrow on "Good Morning America". Check your local listings.

"Here's my assessment of not just the vote in Massachusetts, but the mood around the country: the same thing that swept Scott Brown into office swept me into office," the president said in an exclusive interview with ABC News' George Stephanopoulos. "People are angry and they are frustrated. Not just because of what's happened in the last year or two years, but what's happened over the last eight years."

Brown defeated Coakley in the special election to replace the late Sen. Ted Kennedy. Obama said that while the White House was surprised about the trajectory of the race a week ago, they were not, by last night, surprised by Brown's upset win.

With his victory, Brown becomes the 41st Republican vote in the Senate -- meaning Democrats have lost the 60 seat super-majority they need in the Senate to avoid a Republican filibuster.

Obama insisted today that the Senate wait for Brown to be seated before they make any changes to its version of the health care reform legislation.

"Here's one thing I know and I just want to make sure that this is off the table: The Senate certainly shouldn't try to jam anything through until Scott Brown is seated," the president said. "People in Massachusetts spoke. He's got to be part of that process."

Senate Majority Leader Harry Reid got the message – today he said the Senate would not push a bill through before Brown is seated.

"We're not going to rush into anything," he said on Capitol Hill. "As you've heard, we're going to wait until the new senator arrives before we do anything more on health care. There are many different things that we can do to move forward on health care, but we're not making any of those decisions now."

President Obama Says to 'Coalesce' Around 'Core Elements'

Obama said today it was important for the American people to take a look at the substance and details of the health care reform legislation that Congress is considering.

"I think point number two is that it is very important to look at the substance of this package and for the American people to understand that a lot of the fear mongering around this bill isn't true," Obama said.

Read excerpts of the exclusive interview here.

The president said while it was not his job to dictate to Congress a legislative strategy, he would set a direction on how to achieve a bill that both the House and Senate can pass.

"I would advise that we try to move quickly to coalesce around those elements of the package that people agree on," he said.

Obama said that while there were provisions in the Senate bill that the House does not like, the two bills "overlap about 90 percent."

The president said there are "core elements" to the health care legislation that both Republican and Democrats agree on and they must come together to work for comprehensive reform.

"We know that we need insurance reform, that the health insurance companies are taking advantage of people. We know that we have to have some form of cost containment because if we don't, then our budgets are going to blow up," he said. "And we know that small businesses are going to need help so that they can provide health insurance for their families. Those are the core, some of the core elements of this bill."

Brown campaigned against the legislation that the Senate passed with a straight partisan vote on Christmas Eve. Even some prominent Democratic leaders have said that his victory signals the death of the health care bill.

Both House Speaker Nancy Pelosi and Sen. Reid insisted today that the Democrats plan for a health care overhaul will move forward.

"We will move forward with those considerations in mind, but we will move forward," Pelosi, D-Calif., told the U.S. Conference of Mayors today. She did not specify what Plan B is.

Reid would only vaguely say, "There are a lot of different options out there."

Read excerpts of the exclusive interview here.

Republicans believe a win in the bluest of blue states, where a Republican had not been elected to the U.S. Senate since 1972, amounts to a popular rebuke of the president's agenda.

"There's been a pattern here that began last spring and the administration has refused to acknowledge what the people out across the country have been saying," GOP chairman Michael Steele said on "Good Morning America" today.

President Obama: We Lost Touch with the American People Last Year

Obama said Steele's criticism is not a "plausible point," but acknowledged that steps were taken last year that, while "necessary," were unpopular with the American people.

The president said he understands voters' anger over the Wall Street bailouts, but he insisted that it was the right thing to do.

"I make no apologies for that, at all. But we knew at the time how politically toxic that was," he said. "What it gave people a sense of is, 'We're spending all this money, but I'm not getting any help.'"

The president was reflective (LINK TO GS BLOG) about his first 12 months and said there is a constant balance in moving forward on what he called "big agendas" and trying to bring change to Washington.

"Am I satisfied with the progress that we've made on changing how Washington works? Absolutely not," he said.

He defended his administration's approach, noting that most of the big issues he took on last year "were not ones that I chose."

"I didn't campaign on saving the financial system," he said.

While Obama did not admit to having any second thoughts about the legislative strategy and policies his administration pursued last year, he acknowledged that there was too much focus on the process, particularly when it came to health care.

"I think that if we had gotten health care done faster, people would have understood the degree to which every single day…health care is part of a broader context of, 'How am I going to be able to move the middle class forward in a more secure and stable way?'" he said. "I think that what's happened is, is over the course of this year, there's been a fixation, an obsession in terms of the focus on the health care process in Congress that distracted from all the other things that we're trying to do to make sure that this economy is working for ordinary people."

Obama said that he feels he lost a direct connection to the American people in his first year in office because he focused too heavily on policy-making.

"If there's one thing that I regret this year is that we were so busy just getting stuff done and dealing with the immediate crises that were in front of us that I think we lost some of that sense of speaking directly to the American people about what their core values are and why we have to make sure those institutions are matching up with those values," Obama told ABC News' George Stephanopoulos in an exclusive interview at the White House.

The president said he made a mistake in assuming that if he focused on policy decisions, the American people would understand the reasoning behind them.

"That I do think is a mistake of mine," Obama said. "I think the assumption was if I just focus on policy, if I just focus on this provision or that law or if we're making a good rational decision here, then people will get it."

U.S. Efforts in Haiti Could be Good for National Security, Image Abroad, Obama Says

Instead, the president said the American people ended up with a "feeling of remoteness and detachment" from the policy makers in Washington who are making big decisions.

"I think, you know, what they ended up seeing is this feeling of remoteness and detachment where there's these technocrats up here making decisions. Maybe some of them are good, maybe some of them aren't, but do they really get us and what we're going through?" he said.

Obama said he felt he could do a better job connecting to the American people in his second year in office.

"I think that I can do a better job of that, and partly because I do believe that we're in a stronger position now than we were a year ago," he said.

Obama said the U.S. efforts in Haiti could ultimately be good for national security.

"I want to make sure that when America projects its power around the world, it's not seen only when it's fighting a war," he said. "It's got to also be able to help people in desperate need."

Obama said the United States is being "very careful" about working with the Haitian government and the United Nations on earthquake recovery and relief efforts to avoid any perception the U.S. is there to take over and occupy Haiti.

"There's going to be a longer-term agenda, which is how do you reconstruct a nation that was already incredibly impoverished, that's now been flattened, and a government that, you know, basic records have been destroyed," the president said. "The basic instruments of government in that country are gone. We've got to help Haiti stand back up."

Asked by Stephanopoulos if the United States can afford to do that, Obama said, "We can't afford not to do it because Haiti is our neighbor."

"I think the world looks to us as the world's sole superpower, even though sometimes they complain about us, even though they snipe at us, deep down I think they understand that to those to whom much is given, much is expected," he said.

Obama Family Settled into Life in Washington

After a year in the White House, Obama said he is constantly stunned by how "poised, cheerful, well-adjusted" his daughters, Malia and Sasha have been.

"You know, they entered into a new school halfway in the year. They haven't missed a beat," the president said. "They haven't gotten an attitude; they haven't started acting any different than they were back in Chicago."

ABC News' Huma Khan contributed to this report.