7:01

GEORGE STEPHANOPOULOS: I'm just back from Washington, that exclusive interview with President Obama. And, you know, the President did the interview just before his first campaign rally, the new campaign in Chicago. And I could tell he was warming up for the fight. I was really surprised that he actually took on this whole birther controversy and Donald Trump. I thought he'd take a pass, but he seemed to love talking about it.

ROBIN ROBERTS: And the manner in which he took it on, too.

STEPHANOPOULOS: Big smile on his face.

ROBERTS: With the humor.

7:04

STEPHANOPOULOS: Now more of President Obama's first interview since he announced his reelection run. We talked about everything from the birther battle to the rising gas prices worrying so many of you. And the President began by brushing back the criticism of congressional Republicans who said his blistering budget speech on Wednesday has poisoned the well of bipartisanship.    

BARACK OBAMA: Oh, absolutely not. Look if you look at my speech yesterday it was not so much a critique of what the House Republicans have proposed as it was a description of what they’ve proposed. 

STEPHANOPOULOS: It seems like there's no common ground there.

OBAMA: Well, here's the thing the thing that I think is good.  Everybody now agrees that the deficit has to be cut. We can some up with some very serious spending cuts that Democrats and Republicans can agree helps to put us on the right path.  The key from my perspective is making sure that it’s balanced.

STEPHANOPOULOS: You’ve got to extend the debt limit by May.  And your job is a lot tougher because of your vote in the Senate against extending the debt limit.  When did you realize that vote was a mistake?       

OBAMA: I think that it’s important to understand the vantage point of a Senator versus the vantage point of a President.  When you’re a Senator, traditionally what’s happened is this is always a lousy vote.  Nobody likes to be tagged as having increased the debt limit for the United States by a trillion dollars or a trillion and a half, whatever the number is. As President, you start realizing, "You know what?  We-- we can’t play around with this stuff.  This is the full faith in credit of the United States."  And so that was just a example of a new Senator you know, making what is a political vote as opposed to doing what was important for the country.  And I’m the first one to acknowledge it.

STEPHANOPOULOS: I asked-our viewers for questions for you.  Thousands came in.

OBAMA: Gas prices.

STEPHANOPOULOS: You guessed it.  I want to actually show you Louise Ross, Chester, New Hampshire.  "Why not release at least some of the oil in our reserves before gas reaches $5 a gallon.  If that’s a rainy day fund, it’s pouring out.  Give us a break.  That’s what it’s there for."

OBAMA: Well, I think that we are monitoring the situation very closely.  But the strategic petroleum reserve was designed for when oil actually shuts off.  Having said that I understand how big of a strain this is on family budgets. Now, one good thing that we did was in December, with Republicans, we were able to pass a package of tax cuts that has helped to buffer some of that- that strain on families.

STEPHANOPOULOS: But you’re not ready to release the reserves yet?

OBAMA: The reserves, I think, are something that we’ve got to be very careful about.  And what we don’t want to do is catch ourselves in a situation, particularly when things are uncertain in the Middle East, where we’re using it now and it turns out we need more later.

STEPHANOPOULOS: Why should Americans reelect you?

OBAMA: I think that we have gone through two and a half of the most challenging years that we’ve seen since the Great Depression.  And during that time, not only have we been able to yank this economy out of a very, very deep recession. Not only have we been able to stabilize the financial system and get the economy to grow again, not only have we now produced over 1.8 million jobs just in the last year, but what we’ve also been able to do is to make the society a little fairer, more competitive.

STEPHANOPOULOS: The unemployment's higher. The debt's higher.

OBAMA: We still have to put more people back to work.  We’ve got to bring the deficit down.  Internationally, obviously, we still have enormous challenges, particularly given what’s happened in the Middle East and how we managed that in a way that results in a world that is more democratic and more fair and more just and more respectful of human rights.  I think I’m equipped to help us finish the job.

STEPHANOPOULOS: I wonder how you size up your potential opponents?  I mean all of us have been struck by Donald Trump rising to the top of the Republican field by feeding fantasies about your background.  What do you make of that?

OBAMA: Over the last two and a half years there's been an effort to go at me in a way that is politically expedient in the short-term for Republicans, but creates, I think a problem for them when they want to actually run in a general election where most people feel pretty confident the President was born where he says he was, in Hawaii. He- he doesn't have horns.

STEPHANOPOULOS: Outside, the President expanded on the theme, explaining why he thinks Trump's attacks help him.

OBAMA: The vast majority of Americans across the country– Democratic or Republican– really want this election to be about growing the economy, getting control of the deficit, preparing the future for our kids. And my suspicion is that anybody who is not addressing those questions-

STEPHANOPOULOS: Is in trouble?

OBAMA: Is going to be in trouble.

STEPHANOPOULOS: Thanks for your time.