"I think it's going to take some time and our legal teams are working in consultation with our national security apparatus as we speak to help design exactly what we need to do," Obama said in an exclusive "This Week" interview with George Stephanopoulos, his first since arriving in Washington.
"It is more difficult than I think a lot of people realize," the president-elect explained. "Part of the challenge that you have is that you have a bunch of folks that have been detained, many of whom may be very dangerous who have not been put on trial or have not gone through some adjudication. And some of the evidence against them may be tainted even though it's true. And so how to balance creating a process that adheres to rule of law, habeas corpus, basic principles of Anglo-American legal system, by doing it in a way that doesn't result in releasing people who are intent on blowing us up."
But Obama said unequivocally that it will close. "I don't want to be ambiguous about this. We are going to close Guantanamo and we are going to make sure that the procedures we set up are ones that abide by our Constitution. That is not only the right thing to do but it actually has to be part of our broader national security strategy because we will send a message to the world that we are serious about our values."
Obama said that he is not ruling out prosecution for crimes committed by the Bush administration and left open the possibility of appointing a special prosecutor or commission to independently investigate abuses of power and illegal activity.
Obama's comments came in response to the most popular question on his own Web site, www.change.gov, which has received 23,000 votes on the "Open for Questions" portion of the site. Bob Fertik of New York who runs the Democrats.com Web site asks Obama, "Will you appoint a special prosecutor -- ideally Patrick Fitzgerald -- to independently investigate the gravest crimes of the Bush administration, including torture and warrantless wiretapping?"
"We're still evaluating how we're going to approach the whole issue of interrogations, detentions, and so forth. And obviously we're going to be looking at past practices and I don't believe that anybody is above the law." Obama said. "But my instinct is for us to focus on how do we make sure that moving forward we are doing the right thing. That doesn't mean that if somebody has blatantly broken the law, that they are above the law. But my orientation's going to be to move forward."
When pressed by Stephanopoulos as to whether he will instruct his Justice Department to investigate such accusations, Obama deferred to his nominated attorney general, Eric Holder.
"When it comes to my attorney general he is the people's lawyer... His job is to uphold the Constitution and look after the interests of the American people, not to be swayed by my day-to-day politics. So, ultimately, he's going to be making some calls, but my general belief is that when it comes to national security, what we have to focus on is getting things right in the future, as opposed to looking at what we got wrong in the past."
Obama criticized Vice President Dick Cheney for his public defense of "extraordinary" interrogation methods.
"Vice President Cheney I think continues to defend what he calls extraordinary measures or procedures when it comes to interrogations and from my view waterboarding is torture," Obama said. "I have said that under my administration we will not torture."
When asked if he plans to require that every government interrogation program be under the same standard and in accordance with the Army Field Manuel, Obama said, " My general view is that our United States military is under fire and has huge stakes in getting good intelligence. And if our top army commanders feel comfortable with interrogation techniques that are squarely within the boundaries of rule of law, our constitution and international standards, then those are things that we should be able to."
The incoming president admitted that fixing the economy over the long-term will involve sacrifice from every American and scaling back on some of his campaign promises. "Everybody is going to have to give. Everybody is going to have to have some skin in the game," Obama said.
George Stephanopoulos' interview with President-elect Barack Obama kicks off ABC News' week-long series on the economy, "America's Economy: What's the Fix?"
"These are going to be major challenges. And we're going to have to make some tough choices... So what our challenge is going to be is identifying what works and putting more money into that, eliminating things that don't work, and making things that we have more efficient. I'm not suggesting, George, I want to be realistic here, not everything that we talked about during the campaign are we going to be able to do on the pace that we had hoped."
When pressed by Stephanopoulos and asked if he was "Really talking about over the course of your presidency some kind of a grand bargain...where everybody in the country is going to have to sacrifice something, accept change for the greater good?" Obama simply said, "Yes."
On when such sacrifices would be expected, Obama said, "Right now I'm focused on a pretty heavy lift, which is making sure that we get that reinvestment and recovery package in place. But what you describe is exactly what we're going to have to do."
"What we have to do is to take a look at our structural deficit, how are we paying for government, what are we getting for it, how do we make the system more efficient?"
Viewer questions for Obama came in by the thousands prior to the interview, the overwhelming majority of which focused on the economy. When asked if he feels he will be able to repair the economy, Obama said, "I think we can fix this. But it's going to take some time. It's not going to happen overnight."
"It's going to take some time to fix it. But what we tried to do was put forward a plan that says 'let's act boldly, let's act swiftly.' Let's not only provide a jumpstart to the economy and immediately or save 3 million jobs, but let's also put a down payment on some of the structural problems that we have in our economy," he said.
Obama has received some pushback on the tax break portion of his economic stimulus package, particularly the effectiveness of business tax cuts in stimulating economic growth and job creation. Sen. Tom Harkin, D-Iowa, expressed concerns that Obama's plan amounted to "trickle-down" economics.
"Well, let's look at the package as a whole. The bulk of the package is direct government spending... Now there is no doubt that that probably gives you the most bang for the buck in terms of stimulus, in terms of getting the economy started, putting people back to work," he said. "But there are only so many projects that you can do quickly of that sort. And so then the question becomes, do tax cuts also provide a stimulus? Do they also help? And they may not help as much as some of the direct spending projects do, but they still provide a stimulus, especially if they are targeted towards people who are really in need."
But the president-elect also reiterated "our general philosophy....is we don't have pride of authorship."
"There are a couple of basic principles that I laid out. We've got to move quickly. We've got to make sure that any investments that we make have good long-term benefits for the economy, not just short-term.... but, if people have better ideas on certain provisions, if they say, you know, this is going to work better than that, then we welcome that. And so we're going to have a collaborative, consultative process with Congress over the next few days. But what we can't do is get involved in the typical partisan wrangling or pet project, you know, bartering that takes place."
But red flags have already been raised over "pet projects." Obama responded to criticism surrounding funding for a planned Museum of Organized Crime in Las Vegas explaining, "let's be clear, that was a project that was proposed as part of the mayors' project. The country's mayors put together...a range of projects we can do, we didn't include that."
When pressed if he would want such projects funded, Obama reiterated, "I think that what we have to do is evaluate whether or not these are projects that, as I said, are going to provide long-term benefits to the economy."
"In a package of this magnitude, will there end up being certain projects that potentially don't meet that criteria of helping on health care, energy, or education? Certainly. But what we don't want is this thing to be a Christmas tree loaded up with a whole bunch of pet projects that people have for their local communities."
While the President-elect has made it clear that the economic recovery package is his top priority, the timeline for passing such large legislation remains unclear. Obama has said he wants it done by Presidents Day weekend. "We're not trying to jam anything down people's throats," he said.
"Here's what we know though, that the sooner a recovery and reinvestment package is in place, the sooner we can start turning the economy around. We can't afford three, four, five, six more months where we're losing half a million jobs per month."
Speaker of the House Nancy Pelosi dialed up the pressure on Congress earlier in the week, warning that that there will be no break for the Presidents' Day holiday if the package is not completed by then.
On Capitol Hill, the debate continues over the use of the second half of the $700 billion bailout provided under TARP. Obama weighed in on how the remaining $350 billion in rescue funds should be spent.
"I think that when you look at how we have handled the home foreclosure situation and whether we've done enough in terms of helping families on the ground who may have lost their homes because they lost their jobs or because they got sick, we haven't done enough there," he said.
In response to Chair of the House Financial Services Rep. Barney Frank's proposal to put $50 billion of the remaining funds towards preventing foreclosures, Obama said, "What I've done is asked my team to come together, come up with a set of principles around how we are going to maintain transparency, what are we going to do in terms of housing, how are we going to target small businesses that are under an enormous business crunch?"
"Let's lay out very specifically some of the things that we are going to do with the next $350 billion of money. And I think that we can gain -- regain the confidence of both Congress and the American people that this is not just money that is being given to banks without any strings attached and nobody knows what happens, but rather that it is targeted very specifically at getting credit flowing again to businesses and families."
Obama spoke out against criticism for his relative silence on the conflict in Gaza and defended his assertion that, when it comes to national security, "we cannot have two administrations at the same time simultaneously sending signals in a volatile situation."
But he added that his team is preparing to get involved once he takes office. "What I am doing right now is putting together the team so that on Jan. 20th, starting on day one, we have the best possible people who are going to be immediately engaged in the Middle East peace process as a whole. That are going to be engaging with all of the actors there. That will work to create a strategic approach that ensures that both Israelis and Palestinians can meet their aspirations," Obama said.
The president-elect stood by his comments last July made on a trip to Israel that "If somebody was sending rockets into my house where my two daughters sleep at night, I'm going to do everything in my power to stop that. I would expect Israelis to do the same thing."
When asked if he would say the same in Israel today, Obama said, "I think that's a basic principle of any country is that they've got to protect their citizens."
Comparing his approach to the Middle East to that of previous administrations, Obama suggested that he will not be making a clean break from the Bush policy. "I think that if you look not just at the Bush administration, but also what happened under the Clinton administration, you are seeing the general outlines of an approach."
Earlier in the week, Vice President Cheney told Obama that, "Before you start to implement your campaign rhetoric you need to sit down and find out precisely what it is we did and how we did it. Because it is going to be vital to keeping the nation safe and secure in the years ahead and it would be a tragedy if they threw over those policies simply because they've campaigned against them."
"I think that was pretty good advice," said Obama. "I should know what's going on before we make judgments and that we shouldn't be making judgments on the basis of incomplete information or campaign rhetoric."
On the broader outlook for the Middle East, Obama reiterated his belief that "Iran is going to be one of our biggest challenges... And we are going to have to take a new approach. And I've outlined my belief that engagement is the place to start. The international community is going to be taking cues from us in how we want to approach Iran."
Since winning the election, Obama has become privy to classified daily intelligence briefings. "We have made progress in certain areas but those dangers are still there. And those dangers are not going to immediately go away because we're not talking about conventional armies where we have very clear measures of what their capacity is."
On the nature of the briefings, Obama said, "Most of what I've learned are things that I've anticipated, partly because I was in the Senate and although I wasn't on the intelligence committee we would get top secret briefings. So there hasn't been something that was eye popping. But the situation still requires vigilance."
Obama opened up about his upcoming inauguration address. "I think that the main task for me in an inauguration speech, and I think this is true for my presidency generally, is to try to capture as best I can the moment that we are in it... This is the crossroad that we're at. And then to project confidence that if we take the right measures that we can once again be that country, that beacon for the world."
"My focus is to try to be able to describe in simple, plain terms, the challenges we face, but then also to let people know I have every intention of working with the American people so that we meet those challenges."
Obama has been drawing inspiration for his address from his predecessors, Lincoln in particular. "Every time you read that second inaugural, you start getting intimidated, especially because it's really short. You know, there's a genius to Lincoln that is not going to be matched. People then point to Kennedy's inauguration speech. Sorenson and Kennedy together did an extraordinary job. Some of the others are not as inspiring," he said.
The Obama family moved to DC last week and while the President-elect said his two daughters, Malia, 10, and Sasha, 7, are adapting nicely to their new surroundings.
"I'm trying to figure out why it is that they don't seemed to be fazed by anything. People think -- you know, folks think I'm cool, they are a lot cooler than I am. They just don't seem to be intimidated," Obama said.
But several questions about their lives in Washington remain unanswered. In part because of the demands of the presidential campaign and the furor surrounding his former Pastor Jeremiah Wright, Obama has been without a worship community for about a year.
Obama acknowledges that he misses it.
"It's been a difficult time," he said. "Now, I've got a wonderful community of people who are praying for me every day, and they call me up and -- you know, but it's not the same as going to church and the choir's going and you get this feeling."
Obama said he and his wife Michelle will be visiting churches in Washington, D.C.
"It is tougher as president," Obama said. "You know, this is not just an issue of going to church, it's an issue of going anywhere. You don't want to subject your fellow church members, the rest of the congregation, to being magged every time you go to church. And so, we're going to try to be balancing, not being disruptive to the city, but also saying we want to be part of Washington D.C.," he said.
"But one of the things that I don't like historically about Washington is the way that you've got one part of Washington, which is a company town, all about government, and is generally pretty prosperous. And then, you've got another half of D.C. that is going through enormous challenges. I want to see if we can bring those two Washington D.C.'s together."
And finally, Obama offered up some insight into the future first pooch. The president-elect was accompanied to the "This Week" interview at the Newseum in Washington, D.C. by his two daughters. On a visit to the control room the girls got on the executive producer's headset and offered Stephanopoulos a question for their father.
"While you were getting made up, they went into the control room and played director and producer. And they actually gave me a question they want me to ask you," Stephanopoulos explained. "You know exactly what it's going to be."
"Uh-oh. Go ahead," Obama replied.
"What kind of a dog are we getting and when are we getting it?" Stephanopoulos asked on their behalf.
"They seem to have narrowed it down to a labradoodle or a Portuguese water hound," Obama explained. "We're closing in on it. This has been tougher than finding a commerce secretary."