While he didn't dispute the notion of military progress, Obama said there's plenty to do on the political side to resolve differences between the various sectarian groups. Iraq's security forces also need to be trained, he added.
"I'm confident that we're moving in the right direction. But Iraq is not yet completed. We still have a lot of work to do," the president said of the war that's winding down after six hard-fought years.
Separately, Defense Secretary Robert Gates told "Fox News Sunday" that he hasn't seen "anything at this point that would lead me to think that there will be a need to change the timeline."
The plan that Obama announced last month calls for withdrawing combat troops by the end of August 2010. After the drawdown, a large force of as many as 50,000 troops - about one-third of what is there now - will remain with a new, noncombat mission: train Iraqis, protect U.S. assets and personnel and conduct anti-terror operations.
In the wide-ranging interview he taped on Friday, Obama also said:
-His administration was considering putting more National Guard troops on the U.S. border with Mexico to stem violence from the illicit drug trade. Before making a decision, Obama said he wants to determine whether some of the steps the administration has taken can help quell the violence. He wants to ensure the U.S. is consulting as best it can with the Mexican government.
He said violence spilling over from Mexico's fight against drug cartels has gotten out of hand and is a serious threat to U.S. border communities. He said the U.S. needs to reduce its demand for illegal drugs and limit the flow of cash and guns heading south into Mexico.
-He hasn't abandoned the notion of a permanent middle-class tax cut. The $787 billion stimulus package includes a temporary two-year one that he says will give 95 percent of working families a cut.
"I strongly believe that we should continue those tax cuts. We should make them permanent because ... the average family saw their wages and incomes flatline even during boom times over the last decade," Obama said.
"I think it's the right thing to do. What I've also said, though, is we've gotta pay for it," he said. "I'm gonna be pushing as hard as I can to get it done in this budget. If it's not done in this budget then I'm gonna keep on pushing for it next year and the year afterward."
-Anger over giant bonuses for bailout-recipient American International Group Inc. was justified, but he doesn't want his long-term focus threatened by what he calls the legitimate, but short-term frustrations over some of Wall Street's actions.
"My most important job is to get this economy moving again, to get credit flowing again so that businesses large and small can start rehiring, open their doors and we can start seeing economic growth again," Obama said.
He said he expected financial institutions to show restraint. "It's very difficult for me as president to call on the American people to make sacrifices to help shore up the financial system if there's no sense of mutual obligation and mutual help."
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