David Jackson

USA TODAY

President Obama declared 2014 "a breakthrough year" for the economy and defended his decision to normalize relations with Cuba during an end-of-the-year news conference on Friday.

Saying "Cuba is open to the world in ways that it has not been before," Obama said that more engagement "offers the best prospect, then, of leading to greater freedom, greater self-determination on the part of the Cuban people."

During the 51-minute news conference at the White House, Obama also pledged to respond to North Korea over a hack attack on Sony, said he would seek cooperation with congressional Republicans on issues like tax changes, questioned the value of the proposed Keystone oil pipeline and argued that the nation is having a "healthy conversation" about race relations.

Obama – who also leaves late Friday for his annual vacation in Hawaii – spoke two days after his surprise announcement of plans to normalize relations with Cuba after more than five decades of Cold War-era conflict.

In defending that decision, Obama said the U.S. isolation of Cuba over the last half-century has not helped move that communist nation toward more democracy.

There will not be "overnight changes," Obama said, predicting that things "will happen in fits and starts." But through engagement, he said, "we have a better chance of bringing about change than we would have otherwise."

Obama said his administration will continue to monitor Cuba's treatment of political prisoners, but he said the United States deals with other nations that have bad human rights records.

As for the half-century-long embargo on Cuba, Obama said he cannot "unilaterally" end it, but he hopes that Congress will re-examine it and make changes.

"There are bipartisan supporters of our new approach," Obama said. "There are bipartisan detractors of this new approach. People will see how the actions we take unfold."

In an opening statement promoting the economy, Obama claimed progress in 2014 and vowed to continue pushing his agenda even in the face of opposition from a Republican-run Congress.

Saying that "we can enter into the new year with renewed confidence that America's making significant strides where it counts," Obama cited a spike in job creation and a general economic rebound that includes lower oil prices, falling deficits, better health care and an end to the auto bailout.

Obama also claimed success on foreign affairs, citing the battle against the Islamic State, pressuring Russia to restrain aggression in Ukraine and ending combat operations in Afghanistan.

"America's resurgence is real," Obama said, citing the near economic collapse of 2008. "We are better off."

On other issues, Obama:

• Pledged to bolster the nation's cyber defenses, and criticized Sony for pulling release of "a satirical movie" in the wake of threats from North Korea and its supporters.

"Yes, I think they made a mistake," Obama said, warning that Sony's response could lead to attempts to censor documentaries and other forms of expression.

"I wish they had spoken to me first," he said.

Obama did not discuss what sort of response he might order toward North Korea, which he accused of sponsoring the hack.

• Said he wants to work with the new Republican Congress on tax changes, seeking to create a simpler system in which the wealthy pay more of their "fair share." He added, however, that "the devil's in the details." He insisted he can find common ground with Republicans but also said there could be "tough fights" ahead. He cited exports, tax overhaul, trade and perhaps immigration as potential areas of cooperation.

The president also indicated he remains prepared to take executive actions if necessary, citing immigration as an example.

"Both sides are going to have to compromise," Obama said.

• Said the proposed Keystone pipeline involves Canadian oil -- not American -- with little benefit to U.S. consumers. The president also said he wants to make sure the pipeline project doesn't make the climate change problem worse. He noted that the project also remains tied up in court, delaying State Department consideration of the project.

Reminded that Senate Republicans have vowed to make Keystone their first order of business in January, Obama said: "I'll see what they do."

• Expressed optimism about the state of American race relations, despite tensions following recent deaths of black men at the hands of police.

The president said that, like the rest of the country, black America is better off now than it was when he took office, though more work remains. Those challenges, he said, include relations between police and communities of color, and he hopes a special task force will recommend ways to rebuild trust.

Protest erupted over grand jury refusals to indict police officers, but Obama said he believes the nation has had "a healthy conversation" about race relations, and that "people are basically good, and have good intentions."

Overall, Obama said, the nation has "gone through difficult times" in recent years, but he argued that things are getting better.

"America knows how to solve problems," Obama said. "And when we work together, we can't be stopped."