"The divide between this city and the rest of the country is at least as bad" as the lack of trust between Wall Street and Main Street "and it seems to get worse every year," Obama said during his State of the Union before a joint session of Congress.
"Some of this has to do with the corrosive influence of money in politics. So together, let's take some steps to fix that," Obama said. "Send me a bill that bans insider trading by members of Congress, and I will sign it tomorrow. Let's limit any elected official from owning stocks in industries they impact. Let's make sure people who bundle campaign contributions for Congress can't lobby Congress, and vice versa -- an idea that has bipartisan support, at least outside of Washington."
He said some of what's broken concerns how Congress operates.
"A simple majority is no longer enough to get anything … passed through the Senate," Obama said, noting neither party is blameless. "Now both parties should put an end to it. For starters, I ask the Senate to pass a rule that all judicial and public service nominations receive a simple up or down vote within 90 days."
The executive branch of government wasn't guilt-free either, Obama said.
"Too often, it's inefficient, outdated and remote," he said. "That's why I've asked this Congress to grant me the authority to consolidate the federal bureaucracy so that our government is leaner, quicker, and more responsive to the needs of the American people."
But he also urge lawmakers to "lower the temperature" in Washington.
"We need to end the notion that the two parties must be locked in a perpetual campaign of mutual destruction [and] that politics is about clinging to rigid ideologies instead of building consensus around common sense ideas," he said.
Everyone in Washington should want a smarter, more effective government.
"And while we may not be able to bridge our biggest philosophical differences this year, we can make real progress," Obama said. "With or without this Congress, I will keep taking actions that help the economy grow. But I can do a whole lot more with your help."
Pregnant Mila Kunis wins 'Best Villain' at MTV Movie Awards
'Happy' fan videos make Pharrell cry [VIDEO]