Sen. Evan Bayh, D-Ind., said Sunday he is taking the first official step toward a run for president in 2008, setting up a committee that allows him to raise money and gauge support.

He said he would decide over the upcoming holidays whether to seek the Democratic nomination.

"We need someone who can deal with the dysfunction here in this city," the senator said.

He planned appearances Monday in Iowa and next weekend in New Hampshire, two early states on the campaign calendar.

Bayh acknowledged he faces an uphill battle to make his a household name and become president. "If I can be that individual, so be it," Bayh said. "Is this a little bit like David and Goliath? Yes. But as I recall, David did OK."

Bayh becomes the second Democrat to take a formal step toward a presidential campaign. Iowa Gov. Tom Vilsack is already in the race.

Sens. Hillary Rodham Clinton of New York and Barack Obama of Illinois are among numerous other potential rivals who are expected to decide within a few weeks whether to run.

Bayh has pointed toward a run for the White House for months, and had $10.5 million in his Senate campaign bank account as of Sept. 30. The money can be transferred to his exploratory committee for president.

The 50-year-old senator has charted a centrist's course throughout his political career, including two terms as governor and eight years in the Senate.

Bayh was interviewed on "This Week" on ABC.