WASHINGTON - (AP) - President Barack Obama claimed early progressTuesday night in his dogged campaign to lead the nation out ofeconomic chaos and declared that despite obstacles ahead, "we'removing in the right direction."

At the second prime-time news conference of his presidency,Obama also toned down his criticism of bonuses to executives atbailed-out AIG, and shot back at Republican critics of his budget.

In office for 64 tumultuous days, Obama cast his budget - nowunder review in Congress - as essential if the economy is torecover. The tax and spending plan "is inseparable from thisrecovery because it is what lays the foundation for a secure andlasting prosperity," he said.

Democrats in Congress are readying budget proposals that will largely determinehow much of his first-term agenda will be passed. TreasurySecretary Timothy Geithner is churning out proposals tosolve the nation's economic crisis, while the administration struggles with outrage over bonuses paid to executives of bailed-out AIG.

Obama defended the steps his administration has taken tocounter the recession and an unprecedented credit crisis. He saidteachers and others have jobs today because of the economicstimulus measure that Congress passed, and the nation is"beginning to see signs of increased sales and stabilized housingprices for the first time in a long time."

He said full-fledged recovery is months away, and he added, "Itwill take patience."