President Obama on Wednesday predicted the Republican Party would have to "move back to the center" if it ever wanted to win another presidential election.

During an interview with "Marketplace" radio show, Obama defended his recent effort to sidestep Congress on a number of issues this year in the face of inaction.

He said Republicans are unable to carry out "basic functions of government,” pointing to the failure to pass immigration reform and to the government shutdown last year.

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"I don't think this is a permanent state of affairs,” he said. “I think over time the Republican Party will move back to the center, mainly because if they don't, they'll never win the presidency again.”

Earlier this week, Obama called on his administration to bring him a list of executive actions he can take on immigration reform after determining House Republicans would not act this year, despite support from both parties and business groups.

"Despite all that, we still couldn't get the House of Representatives to act, primarily because of politics, primarily because they're captive of a small ideological band inside their caucus," Obama said.

During the interview, Obama also defended the Dodd-Frank Wall Street reform bill passed during his first term, but said more reforms need to be made.

He noted that the law was not meant to solve all the problems of the banking system but was enacted "to prevent another catastrophic financial crisis."

He said the United States is ahead of other nations in regulating the financial sector, but more reforms are needed to prevent banks from taking "big risks because the profit incentive and the bonus incentive is there for them."

"That is an unfinished piece of business, but that doesn't detract from the important stabilization functions that Dodd-Frank were designed to address," he said.