President Obama on Thursday bristled at criticism of a $400 million cash payment to Iran, stating categorically that it was not a ransom for hostages while dismissing Republican outrage as "manufactured."

Holding a press conference at the Pentagon on his 55th birthday, the president chastised the press for their coverage of the payment, noting that the deal with Iran was announced months ago as part of a larger diplomatic settlement.

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"This wasn’t some nefarious deal," Obama said.

“It’s been interesting to watch this story surface,” the president said. “Some of you may recall, we announced these payments in January. Many months ago. There wasn’t a secret, we announced them to all of you.”

“What we have is the manufacturing of outrage on a story that we disclosed in January,” he added later.

The Wall Street Journal reported late Tuesday that the Obama administration airlifted $400 million cash in foreign currencies to Iran, with the payment arriving on the same day that four American prisoners were released.

The money was the first installment of a $1.7 billion settlement that the two countries agreed to regarding an abandoned arms deal from the 1970s.

While the payment had been announced, the way it was made — by airlifting currency on pallets — has added new fuel to GOP attacks on Obama's foreign policy.

Donald Trump Donald John TrumpBiden leads Trump by 36 points nationally among Latinos: poll Trump dismisses climate change role in fires, says Newsom needs to manage forest better Jimmy Kimmel hits Trump for rallies while hosting Emmy Awards MORE, the Republican nominee for president, blasted the payment, calling it a scandal.

"I got up this morning, I picked up the papers, and I saw $400 million being shipped in cash ... overnight to Iran. We have a president who is, frankly, incompetent," Trump told a crowd on Wednesday at a rally in Daytona Beach, Fla.

"It looks like we paid $400 million for the hostages, such an unbelievably bad precedent by Obama. Two more have been kidnapped since then, when is it going to end? What we are doing is insane."

Republican National Committee (RNC) Chairman Reince Priebus and Speaker Paul Ryan Paul Davis RyanKenosha will be a good bellwether in 2020 At indoor rally, Pence says election runs through Wisconsin Juan Williams: Breaking down the debates MORE (R-Wis.) echoed that criticism.

“This secret deal with Iran only shows how comfortable the Obama Administration is hiding the truth from the American people,” Priebus said in a statement. “At a time when our country is newly concerned about terrorist attacks, we can no longer afford such unprincipled and out-of-touch leadership on the world stage.”

The settlement, announced in January, relates to money that Iran sent to the U.S. as part of an arms deal. After the Iranian regime was overthrown, the U.S. cut diplomatic ties and the arms were never shipped. Iran had sought to get the $400 million back ever since.

The agreement stipulates that the U.S. would pay back the principal $400 million plus $1.3 billion in interest.

Obama hammered Republican critics for suggesting the payment was ransom for the four American prisoners.

“We do not pay ransom for hostages,” he said. "And the notion that we would start now, in this high-profile way ... defies logic.”

The payment was made in cash, Obama added, because the administration cannot send the rogue nation a check or wire transfer due to banking sanctions the U.S. and other nations have imposed on Iran.

“It is not at all clear to me why cash as opposed to a wire transfer has made this into a new story,” he said. “Maybe because it feels like some spy novel or some crime novel because cash was exchanged.”

In a second report, the Journal said officials at the Justice Department objected to the payments being made in cash, fearing how it would look, but were overruled by the State Department.

Obama noted that the deal to repay the $400 million came when the two countries were holding diplomatic discussions for the first time in decades as a result of the Iran nuclear deal.

“The issue is not so much that it was a coincidence as it is that we were able to have a direct discussion,” the president said. “[Secretary of State] John Kerry John Forbes KerryThe Memo: Warning signs flash for Trump on debates Divided country, divided church TV ads favored Biden 2-1 in past month MORE could meet with the foreign minister, which meant that our ability to clear accounts on a number of different issues at the same time converged.”

Obama defended of the Iran nuclear agreement, signed over a year ago, saying that it has “worked exactly the way we have said it was going to work.” He said none of the “horror stories” Republicans told about the deal had come to pass.

Updated at 6:45 p.m.