12:10 p.m. EST: You can't quite call it triangulation -- but it's seems President Obama may be playing a bit of a game of chicken with Republican budget hawks on the Hill, daring them to work with him on the deficit.
Answering his final question, Obama said he "welcomed" criticism of his budget from Republicans that he didn't focus enough on entitlement reform. He said it was an admission that reducing the federal deficit can't simply be done through slashing domestic programs.
He called that "significant progress." And he said he would sit down with congressional leaders in the coming months to hammer out a plan on tackling the budget gap and entitlement spending. The deficit commission, he said again, had provided a "framework."
"I will probably not give you a play by play of every negotiation that takes place," Obama said, adding that all sides will likely have to do "a little bit of posturing" on television even as they talk.
The president said that Wall Street and the markets didn't expect his administration to solve the deficit issue immediately but simply to make substantial progress.
"The markets understand we didn't get here overnight and we're not going to get out of it overnight," Obama said. "What they want to see is that we have the capacity to work together."
With that, the president ended the press conference.
11:59 a.m. EST: President Obama defended his budget's job-creating potential, highlighting investments in areas such as clean energy that are the "industries of the future."
As it relates to taxes, he again defended his intention to let tax rates enacted in the Bush administration to expire, saying bluntly that government "doesn't come for free."
"It's important as we think about corporate tax reform, as we think about individual tax reform, that we try to keep taxes as simple as possible and as low as possible," he said. "But government has to pay for what it buys. And if we believe that its important to have a strong military ... we've got to pay for it."
The president said that most economists, even some who "tend to lean to the right," agree with his view that allowing tax rates to return to higher levels "doesn't in any way impede job growth."
"If you're serious about deficit reduction you don't do that," he said.
Repeating a common theme of Tuesday's press conference Obama said he hoped Republicans and Democrats would "have an adult conversation" and "a full and open debate with the American people" as they begin working on the budget.
"There are going to be some significant disagreements," he said. "At the margins, I think that I'll end up having to compromise on some things. Hopefully others will have that same spirit."
11:52 a.m. EST: President Obama was asked whether he supported the demonstrations erupting across the Middle East, and he used the occasion to defend his foreign policy team, which has been accused of being inconsistent on its approach to the crisis in Egypt.
"History will end up recording, at every juncture, in the situation in Egypt that we were on the right side of history," the president said, quoting, in fact, his old adversary, Sen. John McCain. "What we didn't do is pretend we could dictate the outcome in Egypt -- because we can't."
The president said Egypt's sovereignty was key. "It was important for this to remain an Egyptian event -- that the United States did not become the issue -- but that we sent out a very clear message that we believed in an orderly transition."
And, he maintained: "We were consistent on that message throughout."
Obama said that he was calling for change in Egypt 2 1/2 weeks before Mubarak resigned.
"I think we calibrated it just about right," he said, noting that the result was "relatively anti-American sentiment, or anti-Israel sentiment, or anti-Western sentiment."
As for the demonstrations in other nations, he said the U.S. supported the push for greater opportunities and freedom, but he cautioned, "We do want to make sure transitions do not degenerate into chaos and violence," he said. "That's not just good for us, that's good for those countries."
11:44 a.m. EST: President Obama said he would work with Republicans to avoid a government shutdown but warned against cuts that might "destabilize the economy."
House Republicans have proposed a series of spending cuts totaling $100 billion, following through on a pledge they made in the 2010 campaign.
"I think it's important to make sure that we don't try to make a series of symbolic cuts this year that might endanger the recovery," Obama said.
One reason he agreed to extend the tax rates enacted during the Bush administration was because the economic recovery was "fragile," he said, and now Republicans must acknowledge the same.
"If the steps that we take then prompt thousands of layoffs in state and local government ... well, that could also have a dampening impact on the recovery as well," he said.