WASHINGTON - President Barack Obama defended U.S. electronic spying as a bulwark against terrorism Friday while promising U.S. citizens and allies he will put new restraints on the government’s sweeping global surveillance programs.

In his long-anticipated response to the uproar set off by disclosures of telephone and Internet spying by the National Security Agency, the president said he would require judicial reviews for requests to query phone call databases and that he ordered Justice Department and intelligence officials to devise a way to take storage of that data out of the government’s hands.

He left other steps to limit surveillance up to a divided Congress, meaning many of the changes may be months away if they are adopted at all.

“The power of new technologies means that there are fewer and fewer technical constraints on what we can do,” Obama said in a speech Friday at the Justice Department in Washington. “That places a special obligation on us to ask tough questions about what we should do.”

The final outcome of the steps Obama outlined have implications for U.S. security and for companies involved in technology, telecommunications and the Internet.

The Information Technology & Innovation Foundation, a policy research group in Washington, has estimated the disclosures may cost U.S. companies as much as $35 billion in lost revenue through 2016 because of doubts about the security of their systems and products.

Obama “just still really missed the mark on the economic concerns,” said Daniel Castro, an analyst with foundation. “It’s not getting to these central questions raised by these allegations, which is that the U.S. has been inserting vulnerability into our consumer products.”

Alex Fowler, global privacy and policy leader at Internet nonprofit Mozilla Corp., said in a statement that Obama’s strategy would “leave current intelligence processes largely intact and improve oversight to a degree. We’d hoped for, and the Internet deserves, more.”

Obama gave Attorney General Eric Holder and intelligence officials 60 days to develop a plan for storing bulk telephone records outside of government custody, one of the most contentious issues arising from the disclosures by former National Security Agency contractor Edward Snowden.

A presidential review board recommended moving the data to the phone providers or a third party, but both options present obstacles. The phone companies strongly oppose the expense and potential liability of holding the data, and no credible third-party option has emerged.

The administration plans to deliver a proposal on data storage to Congress by the end of March, said Ben Rhodes, the president’s deputy national security adviser. The final decision about the course to take on holding the data wasn’t made until Thursday night, and Obama was still working on his speech at midnight, Rhodes said.

The president also called for lifting some of the secrecy regarding demands sent to companies for data on customers involved in national security investigations. The White House said those demands, called “national security letters,” will no longer remain secret indefinitely unless the government establishes a need for the secrecy when they are being used in an investigation.

Roughly 20,000 such letters are sent yearly by the FBI to banks, telecommunication companies and other businesses, but recipients are barred from disclosing anything about them. Obama said he wants to change that and allow some of the information to be made public.

Obama said he must balance security and privacy concerns. “Those who are troubled by our existing programs are not interested in a repeat of 9/11, and those who defend these programs are not dismissive of civil liberties.”

Spying and surveillance have been vital to protecting the nation throughout its history, he said, citing groups of citizens who scouted British troops during the U.S. Revolution and spying in the Civil War, World War II and the Cold War.

Still, U.S. traditions and values require that the country be held to a higher standard than other world powers, he said.

“What’s really at stake is how we remain true to who we are in a world that is remaking itself at dizzying speed,” Obama said. “No one expects China to have an open debate about their surveillance programs or Russia to take the privacy concerns of citizens into account.”

Responding to pressure from civil libertarians and technologists to put an independent voice at the Foreign Intelligence Surveillance Court, which reviews warrants related to national security investigations, Obama called for the creation of an outside panel of advocates to weigh in on new and major privacy issues before the court. He is leaving it to Congress to set the rules for what authority and clearances those experts have.

The most concrete and immediate changes announced by Obama will require judicial review for queries of the metadata records. The National Security Agency will need to get approval from the Foreign Surveillance Intelligence Court each time it wants to access the data, a more cumbersome process than currently required. Exceptions will be made in the event of a national security emergency, officials said.

Obama also said intelligence agencies would only pursue phone calls that are two steps removed from a phone number associated with a terrorist organization, rather than three.

Obama offered modest protections to non-Americans, saying the United States would extend privacy safeguards to foreigners for incidental information collected. He said he directed Holder to develop procedures to restrict how long the government could hold that data, and what it could do with it.

“The bottom line,” he said, “is that people around the world - regardless of their nationality - should know that the United States is not spying on ordinary people who don’t threaten our national security, and that we take their privacy concerns into account.”

Under the president’s plan, the U.S. won’t monitor the communications of leaders of close allies unless there is a compelling national security interest.

While that leaves loopholes for the U.S. government to continue its spying abroad, administration officials who briefed reporters on Obama’s plans said the U.S. had already decided not to spy regularly on dozens of foreign leaders. The officials declined to specify who would be exempted.

A rift between the U.S. and Germany opened in October after reports that the National Security Agency had tapped German Chancellor Angela Merkel’s mobile phone. German government spokesman Steffen Seibert said people in his country are “rightfully concerned” about the security of their private data. Germany will continue discussions with the U.S. on a “new and clear basis” for intelligence cooperation, he said.

The reaction was not as warm in Brazil. Vanessa Grazziotin, a Brazilian politician investigating U.S. spying there, said, “The spying on friends and allies should have never happened.”

In his speech, Obama also endorsed allowing Internet providers who receive government requests for data to make more information public than before about those queries.

He didn’t announce any specifics, and a fact sheet released by the White House indicated those decisions have yet to be made. It said administration officials will continue discussions with the companies.

He also issued a presidential directive saying the U.S. doesn’t use the intercepted data to provide economic advantage to companies, indiscriminately review emails of ordinary people or suppress dissent. The directive says the U.S. uses surveillance for counter intelligence, counter terrorism, cyber security and investigating transnational crime.

The president’s moves are “an attempt to address the concerns that the government holds and accesses too much data, but in many ways, he is leaving the details and mechanics of this to the attorney general and Congress to resolve,” Juan Zarate, a counter-terrorism adviser to former President George W. Bush, said before the speech.

U.S. data-collection programs were expanded during Bush’s administration by Congress’ USA PATRIOT Act in response to the Sept. 11, 2001, terrorist attacks on the U.S.

Many of the changes Obama seeks will require legislation, which would have to get through the divided Congress.

Sen. Dianne Feinstein, D-Calif., who heads the Senate Intelligence Committee, wants the data program to continue without forcing companies to collect and keep the records. Sen. Patrick Leahy, D-Vt., and Rep. James Sensenbrenner, R-Wisc., have introduced legislation to bar the National Security Agency from collecting the phone records, as has Sen. Rand Paul, R-Ky.

Paul, a critic of the agency, said he was “disappointed” by Obama’s speech.

“President Obama’s announced solution to the NSA spying controversy is the same unconstitutional program with a new configuration,” Paul said in a statement. “The American people should not expect the fox to guard the hen house.”

Leahy said that he will keep pushing for tighter restrictions on government surveillance.

“The president has ordered some significant changes, but more are needed,” he said, so that the law “is not used for dragnet surveillance in the future.”

Civil-liberty advocates said they were disappointed that the government could still collect phone numbers.

“Although we’re heartened by many of the positive steps that the president outlined today, many key questions and reforms were left unaddressed, and many controversies punted to Congress or to other government officials,” said Sascha Meinrath, director of the Open Technology Institute and vice president at the New America Foundation, a nonpartisan public-policy think tank, which provided suggestions to the White House. “To restore the trust in the United States as a responsible steward of the Internet, the president should be acting now.” Information for this article was contributed by Margaret Talev, Chris Strohm, Julianna Goldman, Roger Runningen, Derek Wallbank, Joe Sobczyk, Del Quentin Wilber, Michael C. Bender, Sarah Frier and Oliver Suess of Bloomberg News; by Mark Landler, Peter Baker, Charlie Savage and David E. Sanger of The New York Times; by Julie Pace, Stephen Braun, Nedra Pickler, Josh Lederman, Henry C. Jackson, Frank Jordans and Stan Lehman of The Associated Press; and by Anita Kumar of the McClatchy Washington Bureau.

Front Section, Pages 1 on 01/18/2014