The president challenged Republicans and urged Congress to extend expiring tax cuts immediately for all but the nation's highest income earners as a way to eliminate half of the fiscal cliff that threatens to send the economy back into recession.
Approximately $650 billion in spending cuts and tax increases will go into effect Jan. 1 if there's no deal in Congress.
Raising taxes on the wealthiest Americans and not on the middle class was a centerpiece of the president's re-election message and at Wednesday's news conference, he signaled he's not backing down.
Congressional leaders are slated to meet with the president at the White House on Friday to begin the search for a compromise.
Mr. Obama laid out a two-step process for an overall compromise - immediate extension of all the expiring tax cuts except the top rate, followed by a comprehensive agreement in 2013 to overhaul the tax code and the government's big benefits programs, which include Medicare, Medicaid and Social Security.
The other big news the president was grilled on was the sex scandal involving former CIA Director David Petraeus.
Patraeus resigned last week after news broke of his extramarital affair with his biographer Paula Broadwell.
The scandal has since widened and involves Petreaus' replacement in Afghanistan, Gen. John Allen, who allegedly sent inappropriate emails to Tampa socialite Jill Kelley.
Congress is now trying to figure out why they weren't alerted sooner of the investigation.
As for the president, he said he is withholding judgment about the handling of a federal investigation that cost the CIA director his job, but he's seen no evidence "at this point" that national security was damaged by the widening sex scandal.
"I have a lot of confidence generally in the FBI," Mr. Obama said, offering only qualified words of support for the agency. But the president added that if the FBI had given the White House an earlier heads-up about the inquiry into possible national security violations, he might now be facing questions about why he'd interfered in a criminal investigation.
Mr. Obama said he hoped the scandal would be a "single side note" in Petraeus' otherwise extraordinary career.
The president also took the opportunity to talk about immigration reform. He said he will need to "seize the moment" and pass comprehensive immigration overhaul.
His support among Hispanics was one of his keys to victory over Republican rival Mitt Romney, who staked out conservative positions on immigration changes during the GOP primaries. Mr. Obama failed to make progress on comprehensive immigration changes during his first term but said he planned to "seize the moment" after his inauguration.
Another hot topic at the news conference surrounded U.N. Ambassador Susan Rice, who has been the target of much criticism from senior Republican senators in the aftermath of the deadly Sept. 11 attack in Libya.
Sen. John McCain, R-Ariz., had vowed shortly before Mr.Obama's remarks that he would take all steps necessary to block Rice's nomination if the president taps her to replace Secretary of State Hillary Rodham Clinton. Sen. Lindsey Graham, who joined McCain at a Capitol Hill news conference, said he didn't trust Rice.
The president defended the ambassador.
"If Sen. McCain and Sen. Graham, and others want to go after somebody, they should go after me," Mr. Obama said. "And I'm happy to have that discussion with them. But for them to go after the U.N. ambassador who had nothing to do with Benghazi and was simply making a presentation based on intelligence that she had received, and to besmirch her reputation is outrageous."
At issue are Rice's statements on a talk show five days after the attack on the U.S. diplomatic mission in Benghazi that killed Ambassador Chris Stevens and three other Americans. She attributed the incident to the outrage in the Arab world over an anti-Muslim video, not terrorism.
In response to Mr. Obama's statements at the press conference, Graham's response made clear he wouldn't back down from challenging Rice's nomination.
The Associated Press contributed to this report.
