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CBSNews.com's Brian Montopoli contributed to this report
WASHINGTON (CBS) ― President Obama addressed the nation's economic woes Tuesday night during a prime-time news conference, offering a brief update on the steps his administration is taking to move the economy from a "recession to recovery to ultimate prosperity." He also called on Americans to look to the future "with a renewed confidence that a better day will come."

Obama also sought to tamp down on anger over the AIG bonuses even as he assured Americans that he is "as angry as anybody" about the situation.

"Bankers and executives on Wall Street need to realize that enriching themselves on the taxpayers' dime is inexcusable, that the days of outsized rewards and reckless speculation that puts us all at risk have to be over," he said. "At the same time, the rest of us can't afford to demonize every investor or entrepreneur who seeks to make a profit. That drive is what has always fueled our prosperity, and it is what will ultimately get these banks lending and our economy moving once more."

The president sought to move beyond the AIG scandal that dominated last week's headlines during his second prime-time press conference. In opening remarks, he pushed his ambitious $3.6 billion budget proposal, arguing that it "lays the foundation for a secure and lasting prosperity."

Investment in renewable energy, he said, will "lead to new jobs, new businesses, and less dependence on foreign oil," while health care reform will reduce costs for businesses, the government and individuals.

The overall proposal, he said, will ensure "that we do not face another crisis like this ten or twenty years from now."

Mr. Obama also took on Republican critics who argue that his administration is spending too much in its budget and bailout efforts. In a statement released just before the news conference, the National Republican Senatorial Committee said his "massive budget proposal would increase our nation's deficit to its highest level since World War II and burden our children and grandchildren under trillions of dollars in debt."

"At the end of the day, the best way to bring our deficit down in the long run is not with a budget that continues the very same policies that have led to a narrow prosperity and massive debt," the president said.

Reporters repeatedly pressed the president on spending during the news conference.

"Under your budget, the debt will increase $7 trillion over the next 10 years," CBS News White House Correspondent Chip Reid said. "The Congressional Budget Office says $9.3 trillion. And today on Capitol Hill, some Republicans called your budget, with all the spending on health care, education and environment, the most irresponsible budget in American history. Isn't that kind of debt exactly what you were talking about when you said 'passing on our problems to the next generation'?"

"First of all, I suspect that some of those Republican critics have a short memory, because, as I recall, I'm inheriting a $1.3 trillion deficit, annual deficit, from them," responded Mr. Obama. "That would be point number one."

He went on to say that "it is going to be an impossible task for us to balance our budget if we're not taking on rising health care costs, and it's going to be an impossible task to balance our budget or even approximate it if we are not boosting our growth rates."

Mr. Obama declined to say whether he would sign a budget that eliminates his middle-class tax cut after 2010, as some Senate Democrats have proposed.

The president's prime-time appearance was the latest stop in a recent media blitz that has included interviews on CBS' "60 Minutes" and "The Tonight Show." The White House feels that the president, whose popularity remains high despite the uproar over the AIG bonuses, is its best salesman for the administration's ambitious proposals.

The economy wasn't the only topic that the president addressed Tuesday night, though it did dominate the discussion. He said the American people are sacrificing "left and right" during the economic crisis, arguing that "across the board people are making adjustments large and small to accommodate the fact that we're in very difficult times right now."

"We will recover from this recession," he said. "But it will take time, it will take patience, and it will take an understanding that when we all work together; when each of us looks beyond our own short-term interests to the wider set of obligations we have to each other - that's when we succeed. That's when we prosper. And that's what is needed right now."

The president was asked about the impact of his race and whether his time in office has been "a relatively color-blind time." He said he is being judged by the quality of his work, not the color of his skin - which is "exactly the way I should be judged."

He also said he is "heartbroken" that any child in America lacks a home, adding that "the most important thing that I can do on their behalf is to make sure their parents have a job."

The last question focused on the prospect for peace between Israel and the Palestinians; the president said that a two-state solution is "critical" and that "the status quo is unsustainable."

He cited the peace in Northern Ireland as evidence that "if you are persistent, then these problems can be dealt with." He closed with comments on the "whole philosophy of persistence," in which he said he is a "big believer."

"…you look back four years from now, I think, hopefully, people will judge that body of work and say, 'This is a big ocean liner. It's not a speedboat. It doesn't turn around immediately. But we're in a better place because of the decisions that we made,'" he said.

(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)