"I think one of the cautions that has to be given to the president -- and I've talked to some of his people about this -- is that you can't have so many things on the table that you can't absorb it all," he said. "And we can't pay for it all."
The interview with the former chairman of the Joint Chiefs of Staff and secretary of state is to air Sunday on the program "State of the Union."
Powell said he continues to have a good relationship with Obama.
"We stay in touch," he said.
Powell also suggested he has given up on some Republican orthodoxy. He said he does not like "slogans like limited government."
"The people want their problems solved," Powell said. "And very often, it's government that has to do that. So let's have good government, effective government, whether you call it limited or not."