Obama sees challenges ahead

BALTIMORE (Reuters) - Barack Obama warned Americans on Saturday of the vast challenges ahead as he rolled by train towards Washington, kicking off three days of celebration of his inauguration as the 44th president of the United States.

Obama waved to crowds from the back of a vintage train car and stopped twice for rallies in frigid weather on the journey from Philadelphia to Washington, where he takes office on Tuesday amid the deepest economic crisis in generations and wars in Iraq and Afghanistan.

"Only a handful of times in our history has a generation been confronted with challenges so vast," Obama said as he began the trip in Philadelphia, evoking the patriots who launched the American fight for independence in the city in 1776.

"While our problems may be new, what is required to overcome them is not," Obama said. "What is required is the same perseverance and idealism that our founders displayed."

He stressed in Philadelphia and at later stops in Wilmington, Delaware, where he was joined by Vice President-elect Joe Biden, and Baltimore that it will take time and sacrifice to turn the economy around.

"Such enormous challenges will not be solved quickly. There will be false starts and setbacks, frustrations and disappointments," Obama told about 40,000 cheering supporters who greeted him in Baltimore.

"We will be called to show patience even as we act with fierce urgency," he said.

Obama, a Democrat, has vowed to spend hundreds of billions of dollars to jolt the country out of a deepening recession.

"America faces its own crossroads -- a nation at war, an economy in turmoil, an American Dream that feels like its slipping away," Obama said in Wilmington.

The 137-mile (220-km) train journey launches three days of parties, concerts and shows to celebrate Obama's swearing-in at the U.S. Capitol on Tuesday afternoon.

The carefully staged trip was designed to recall the 1861 rail journey to the capital by Abraham Lincoln before he entered the White House. Obama frequently evokes Lincoln, a fellow native of Illinois and the 16th president, who led America during the Civil War and ended slavery in the United States.

Obama will become the first black U.S. president when he is sworn into office. Janice Winston, 56, said she was overjoyed at the prospect.

"A NEW DAY"

"It's finally hitting me, because I'm starting to cry, that this is really happening," Winston, who is black, said at the station in Philadelphia. "Today is a new day."

Obama's train slowed to a crawl at a few spots along the route so he could step out onto the back of his carriage and wave to the crowds that lined the tracks in frigid weather.

In Claymont, Delaware, several hundred people gathered to cheer and wave to Obama, holding signs reading "Halleluja, We Did It," and "Hail to the chief." In Edgewood, Maryland, the waiting crowd chanted "Obama" as the train rolled by.

Obama was joined on the train trip by about 40 invited "everyday Americans." He and Biden, along with their wives, visited them during the trip.

"This is more than an ordinary train ride, this is a new beginning," Biden told the crowd in his hometown of Wilmington.

Obama's swearing-in will cap a relatively smooth transition to power marred by a few missteps, including the revelation that his choice for treasury secretary, New York Federal Reserve Bank President Timothy Geithner, had failed to pay thousands of dollars in taxes.

Despite the mistake, Geithner is expected to be confirmed by the Senate and lead the administration's drive to cure the ailing economy, which continues to be bombarded by dismal news in the worst recession in decades.

At each stop of the train journey, Obama emphasized the need to band together to tackle America's problems and rise above "ideology, small thinking, prejudice and bigotry."

A new New York Times/CBS News poll showed Americans were confident Obama can turn the economy around and prepared to give him years to deal with the crush of problems he faces.

Majorities of Americans said they did not expect real progress on the economy, healthcare improvements or ending the war in Iraq for at least two years, the poll found.

His incoming White House chief of staff, Rahm Emanuel, told a conference of mayors in Washington the new administration was focussed on making the U.S. economy more competitive.

"We have got to invest in things that work in a different way," Emanuel said.

The priorities, he said, included investing in energy independence, modernizing healthcare and expanding coverage, delivering universal broadband Internet for a digitized economy and upgrading schools -- all of which will add to the already staggering price tag facing the Obama administration.

(Writing by John Whitesides; Additional reporting by Jon Hurdle in Philadelphia, Andrea Shalal-esa in Baltimore and Jim Wolf in Washington; Editing by Eric Beech)