By Ed O'Keefe
washingtonpost.com Staff Writer
Monday, July 28, 2008

CHICAGO, July 27 -- Ahead of a week of campaign appearances focused on the economy, Sen. Barack Obama suggested Sunday that there is a domestic economic benefit to improved U.S. relations with the rest of the world.

"When you think about the big problems we face here at home, they're connected to the problems we face abroad," Obama said before an audience of several hundred here at the quadrennial "Unity: Journalists of Color" conference. A broader international effort in Afghanistan and a drawdown of U.S. forces in Iraq, he added, have the potential to "free up money to keep folks in their homes" and provide funds for other domestic concerns.

"We can't keep spending $10 billion a month in Iraq, at a time when we have pressing needs here in the United States of America," the Democratic presidential candidate said.

Obama called the housing bill that went to President Bush's desk on Saturday "a good start in creating a floor beneath which the housing market will not sink," adding later that "we're going to have to do more."

While the senator from Illinois tried to keep his remarks focused on domestic concerns, he did share some impressions of his just-completed trip abroad.

"The world is waiting for the United States to reengage. In the Middle East, Israelis and Palestinians are waiting for us to get involved," he said, adding there should be "sustained American engagement" in the region's peace process. He said reaction to his Berlin speech "was a testimony for how hungry Europeans are for American leadership."

Unity had also invited the Republican candidate, Sen. John McCain, to address the convention, but his campaign declined, citing a scheduling conflict.