During a Washington news conference to introduce Nancy Killefer as his choice for the nation's first chief performance officer, Obama noted he will inherit a $1.2 trillion budget deficit at a time when the economy is in deep trouble.
Last April, Rep. Randy Forbes, R-Va., estimated entitlements make up 62 percent of the federal budget with Social Security and Medicare accounting for half that total.
Obama said budget discussions are under way and he expects to unveil his approach next month.
"Discussion around entitlements will be a central part of those plans," he said.
Obama said he plans to make "change and reform" a reality, not just election-year rhetoric.
"Even in good times, Washington cannot afford to continue these bad practices," he said, adding he intends to restore confidence in federal spending.