Washington, D.C. ? Sen. Evan Bayh, D-Ind., said Sunday that he would establish an exploratory committee this week, marking his first formal step in a possible run for the presidency in 2008.

“We need someone who can deal with the dysfunction here in this city so that our government begins to empower our people to fulfill their potential,” he told ABC’s “This Week.”

He said he would make his final decision early next year after talking about it with his family over the holidays. He and his wife, Susan, have 11-year-old twin sons.

Bayh’s statement, which had been widely expected, follows the announcement last week of a presidential run by another Democrat, Iowa Gov. Tom Vilsack.

Formation of an exploratory committee will allow Bayh to begin raising money and take other preliminary steps for a presidential candidacy.