In his speech Friday, the President plans to say that the metadata program can be changed to assure Americans that it is not being abused.
President Obama called Friday for ending the National Security Agency's ability to store phone data from millions of Americans, and asked Congress, the Justice Department and the intelligence community to help decide who should hold these records.
In a long-awaited speech on government surveillance policies, Obama aggressively defended bulk collections of telephone and Internet data as important tools to combat terrorism.
The president also said civil libertarians have raised legitimate worries about the potential for abuse, and that he is seeking to balance the demands of national security and with the needs of personal privacy.
"We have to make some important decisions about how to protect ourselves and sustain our leadership in the world, while upholding the civil liberties and privacy protections that our ideals -- and our Constitution -- require," Obama said during his speech at the Justice Department.
He added: "We cannot unilaterally disarm our intelligence agencies."
Some NSA critics said the president's plans don't go far enough, and are riddle with loopholes that intelligence and law enforcement agencies can exploit.
"I am unwilling to sacrifice the privacy rights and civil liberties of Americans for the excessive collection of personal data," said Rep. Loretta Sanchez, D-Cal.
Sen. Rand Paul, R-Ky., predicting that the Supreme Court will ultimately decide the NSA's authority, likened Obama's speech to his health care promises. Rand told CNN: "I think what I heard is that if you like your privacy you can keep it."
Obama said he has ordered Attorney General Eric Holder and the intelligence community to deliver a report by March 28 on how to handle and store bulk data collections. The president will also consult with the relevant committees in Congress on their views.
A special committee appointed by Obama last year has recommended that telephone metadata by held by a third party, or the phone companies themselves. But some phone providers have balked at the latter idea.
In the speech and in a flurry of written government orders, Obama also:
-- Called on Congress to authorize "a panel of advocates from outside government" to raise possible privacy and civil liberties concerns within the special court that oversees the Foreign Intelligence Surveillance Act and approves warrants for snooping.
Obama did not adopt outside proposals to create a permanent "public advocate" position at the FISA Court. Some judges have criticized that idea, questioning whether a public advocate would have legal standing.
-- Ordered annual reviews of the government's surveillance activities and rules.
-- Issued a presidential policy directive outlining general rules and restrictions on "signals intelligence activities."
-- Announced new requirements for surveillance of foreign leaders, saying they should demand "a compelling national security purpose."
Brazilian President Dilma Rousseff and German Chancellor Angela Merkel have protested NSA spying on their governments. Rousseff canceled a state visit to the United States over the issue.
Some of the new rules apply to spying on any foreign citizen, Obama said.
All countries should know that "the United States is not spying on ordinary people who don't threaten our national security," and "we take their privacy concerns into account," Obama said.
"This applies to foreign leaders as well," he said.
The address was the latest phase in a months-long review of NSA policies, spurred by news leaks from former contractor Edward Snowden about the scope, reach, and possible abuses of spying programs.
Obama made two references to Snowden. He said at one point that "I'm not going to dwell on Mr. Snowden's actions or motivations," but added "our nation's defense depends in part on the fidelity of those entrusted with our nation's secrets."
His new plans "should give the American people greater confidence that their rights are being protected, even as our intelligence and law enforcement agencies maintain the tools they need to keep us safe," Obama said.
Obama repeatedly defended the NSA, saying that surveillance programs are essential tools in preventing terrorist attacks, and that employees consistently follow the rules.
After the attacks of Sept. 11, 2001, Obama noted, government officials and citizens demanded that intelligence agencies improve their performance in order to break up future plots.
"Laboring in obscurity, often unable to discuss their work even with family and friends, they know that if another 9/11 or massive cyber-attack occurs, they will be asked, by Congress and the media, why they failed to connect the dots," Obama said.
The president's NSA speech will not end the privacy/security debate, however.
For one thing, Congress must sign off on many of Obama's proposals.
The surveillance programs are also the subjects of multiple lawsuits, and the security-privacy issue could wind up before the Supreme Court.