Massachusetts Democrat John Kerry, a leading Senate liberal and decorated gunboat officer during the Vietnam War, said Sunday he is taking a first step toward running for president in 2004.

He took aim at President Bush's policies on taxes, education, Iraq and the Middle East, saying, "There is a better choice for this nation." Bush, asked Sunday night about the prospect of running against Kerry, smiled at reporters but said nothing.

Kerry, a 58-year-old former prosecutor first elected to the Senate in 1984, has said for the past year that he was seriously thinking about a run in 2004. He was unopposed for re-election in November to a fourth term -- the first Massachusetts senator in 80 years with no major-party opposition.

"I'm going to file this week an exploratory committee, a formal committee, and I'm going to begin the process of organizing a national campaign," Kerry said on NBC's Meet the Press.

An official announcement of his candidacy is months away, Kerry said.

Exploratory committees are established by budding candidates mainly to raise money, finance travels around the country and help gauge voter support.

"When you really get into the formal stage, which I am now entering, you find out who's prepared to be there, you see if you can raise the money," Kerry said. "It becomes real."

The best-known Democrat to emerge from Massachusetts is President John Kennedy -- and Kerry did not shy from invoking his memory. But other Bay State Democrats have not fared as well in national elections.

Kennedy's brother, Sen. Edward Kennedy, failed in 1980 to win the presidential nomination, as did Paul Tsongas in 1992. Gov. Michael Dukakis -- a Kerry mentor -- won the 1988 nomination, but lost by a wide margin to Bush's father.

Democrats are expected to have a crowded field of candidates, with the party convention to be held in Boston.

Vermont Gov. Howard Dean already is running. Former Vice President Al Gore, the 2000 nominee, and North Carolina Sen. John Edwards expect to disclose their plans after the Christmas holidays. Outgoing House Democratic leader Dick Gephardt of Missouri is expected to begin telling colleagues whether he plans to run. Also considering the race is Gore's running mate from two years ago, Sen. Joseph Lieberman of Connecticut, who has said he would not run if Gore does.

A recent Los Angeles Times poll of Democratic National Committee members showed Gore and Kerry topped lists when people were asked their favorites.

During the NBC interview, Kerry repeatedly mentioned his service in Vietnam. He was an officer on a gunboat in the Mekong Delta and received numerous decorations for his combat experience, including a Silver Star and three Purple Heart awards. He later led demonstrations against the war after he returned home.

"I served in the armed services -- I love this country," he said. "I have a great sense of what this country can be and what it is."

That background could deflect some of the criticism he could face for his voting record. He has voted with liberal standard bearer Kennedy 93 percent of the time.

Still, Kerry did not shy from those positions in making the announcement, restating his opposition to the death penalty and forcefully challenging Bush's proposed tax cuts.

"We can't go on any longer pretending to Americans that you can have everything and that nobody has to have any cost attached to it," he said.

"What Sept. 11 taught us, or reminded us perhaps, is that there are some things that only the government will do ... it's your traffic jam, it's your school that's falling apart, it's your airport system that doesn't work, it's your security system that isn't there."

Kerry has been drawing differences with Bush in the areas of energy and foreign policy in appearances around the country. He plans to lay out his economic plan in a policy speech Tuesday in Cleveland, including focusing tax cuts more on the middle class.

Republican arguments that rescinding promised tax cuts amounts to an increase are "silly," Kerry said. "No average American believes that's an increase."

Kerry said he favors a tax cut that "comes in a payroll tax reduction that will put more money in the pocket of the middle class and average worker." A payroll tax refundable credit would leave Social Security untouched, he said.

He also rejected Bush proposals on school vouchers, and scored the administration's education policies as regressive, saying he would spend more money on public schools.

"There aren't enough seats at the table of charter schools," he said. "We have a new problem in America, it's called separate and unequal .... And you don't have a prayer in many communities of providing equality of education unless you have equality of resources."

Kerry said he would back war with Iraq only if Bush could prove an imminent threat, and said he viewed unilateralism as dangerous. "The United States of America should not go to war because it wants to go to war. We should go to war because we have to go to war."

He also said the administration had abandoned the role of honest broker between Israel and the Palestinians.

"They gave the green light, if you will, to the most negative instincts of that region to begin to take hold," he said, adding that he would remind Israel that it would eventually have to stop settlement building.

Kerry said his wife, Teresa Heinz, fully backed his campaign, although she has publicly expressed reservations in the past.

Kerry has more than $3 million in his Senate election committee that can be rolled into a presidential effort, associates said.

In the past, Kerry and his wife, heir to the Heinz ketchup fortune, have decided against using their own money, which totals in the hundreds of millions of dollars, for campaigns. He did not discuss campaign financing during the televised interview.

Kerry does not take money from political action committees representing corporations, labor unions and interest groups.