August 04, 2008 12:00 PM

“Oh,” says Michelle Obama, surveying her Chicago living room. A stuffed panda is plopped beside the marble fireplace. “That doesn’t really belong there. It was part of a Kung Fu Panda performance the girls put on right here last night.” In the next room, at the baby grand piano, daughter Sasha is plucking the keys of “Li’l Liza Jane” from a Faber lesson book. It’s only when the 7-year-old skips barefoot out the front door that you’re reminded this three-story house in the Hyde Park neighborhood does not belong to your ordinary family. A Secret Service agent posted in the dining room whispers into his sleeve: “Front porch.”

Come January, “front porch” for Sasha and big sister Malia, 10, could be the Truman Balcony. Their father, 46-year-old Barack Obama, the senator from Illinois whose promise of hope and change has swept Democrats off their feet this year, will in all likelihood claim his party’s presidential nomination in August and perhaps take another step toward writing history as the nation’s first black President. If he does make it to the White House, it will be with two of the youngest residents in more than 30 years, since Amy Carter moved in at the age of 9 in 1977. Says presidential historian Doris Kearns Goodwin, who considers the Obamas’ youthful household to be part of the candidate’s allure: “To the extent that Obama’s appeal has been to a younger generation, his exuberant children symbolize that hope of a changing guard.”

Earlier this summer, the Obamas agreed to allow PEOPLE into their Chicago home and to travel with them on the campaign trail for an intimate conversation about how they live their lives. They are eager to protect their daughters’ privacy—and the senator recently expressed his regrets for letting the girls be interviewed on Access Hollywood. The subject of the future “may come up when we’re out for a walk [with the girls]. ‘What’s it like living in the White House?’ And we don’t really know,” says Michelle, 44. So far, says Barack—impatient at first after a draining day on the stump but ready to talk about the girls—the race for the Presidency has seemed to do no harm to their daughters: “I’ve been really happy by how nonplussed they’ve been by the whole thing.”

For the past three years, the family has lived in a six-bedroom Georgian revival blocks from the University of Chicago on the city’s South Side. The dark, wood-paneled first floor, scattered with Asian and African art picked up during their travels, is mostly for when company comes. In the den, paperback novels fill glass-fronted bookcases and a family portrait by Annie Leibovitz is displayed in a frame the only way it fits—turned on its side. In the dining room, a mismatched light fixture stands out. “I know it’s wrong,” says Michelle. “I’ve been meaning to change it for two years now.”

There clearly hasn’t been much time for decorating since Barack and Michelle Obama, flush with cash from his best-selling memoirs, paid off their student loans and bought the house for $1.65 million in 2005. Since then, Barack has moved from the Illinois senate to Capitol Hill and launched his presidential bid. Michelle juggled her job as a hospital executive with two kids and no nanny until January, when she took leave to support her husband’s candidacy. Was this what the couple, both Harvard-trained lawyers, envisioned when they married in 1992? “Whooo-boy! No. To me, life was you get married, you have kids, you buy a home,” says Michelle, the daughter of a Chicago city worker and stay-at-home mom. “I thought Barack would be a partner at a law firm or maybe teach or work in the community. We’d watch our kids go to college and go to their weddings and take care of the grandkids and that was it.” And now? She shrugs, eyes wide. “Who knows?”

Whatever the future may hold, the Obamas want a life of stability and daily routine for their girls, something that Barack, who was abandoned by his Kenyan father at the age of 2, missed as he shuttled between his mom, who moved to Indonesia, and grandparents, who lived in Honolulu. “Our childhood was constant moving and adventure but little stability,” says Obama’s half sister Maya Soetoro-Ng, 38. “Barack wants for his girls a rootedness and community that he didn’t have.”

As the family poses for photographs on the living room couch, the women of the family gang up on the lone male. Michelle pokes at Barack’s thinning hair, prompting him to retort, “Well, Sasha has no teeth.” At which point Malia, without skipping a beat, shoots back, “But what about your head?” “Nice comeback,” says Michelle. After a click of the shutter, Sasha reprimands her father: “You weren’t smiling!” Barack rolls his eyes and smiles. “They are just sweet,” he says afterward. “They make me happy.”

The girls may be irreverent, but they are also well mannered, slipping off their shoes before climbing on the velvet sofa. “There are downstairs rules,” Michelle says later, like no shoes on the furniture. But in the girls’ third-floor playroom the couch doubles as a trampoline. “So there are different rules in different parts of the house,” Michelle continues.

In the kitchen, where it’s the girls’ job to set and clear the dinner table, sunlight streams through a solarium-style glass wall, showing off black granite countertops—and dust collecting on an unopened bottle of Kendall-Jackson chardonnay. Michelle’s 71-year-old mother, Marian Robinson, is unpacking the family’s take-out lunch from Subway. These days, with Barack gone, by his estimation, “98 percent of the time,” and Michelle herself campaigning two or three days a week, the girls’ grandmother runs them to summer day camp and enforces, more loosely than their parents would like, their nightly hour of TV time and 8:30 p.m. bedtime. As Robinson told PEOPLE last year, she’s a little lax. “But don’t tell him because he cannot stand TV watching.”

Sorry, Mrs. Robinson, “he” knows. We’re in the back of the campaign bus, waiting out a July 4 hailstorm in Butte, Mont., and Barack is talking about how, thanks to Grandma, Malia has been picking up campaign reporting from TV news. “When some folks were attacking Michelle, Malia just asked, ‘What was that all about?’ And we talked it through,” he says. Fortunately, he adds with a playful grin, “she’s completely confident about her mommy’s wonderfulness.”

While Dad’s on the road, the Obama women keep a dizzying schedule—soccer, dance and drama for Malia, gymnastics and tap for Sasha, and tennis and piano for both. Three times a week, Michelle manages a 90-minute workout. Tall, with well-toned muscles, she says she looks into the mirror and sees a healthy woman. “But there’s always 10 lbs. somewhere, right?” she asks. Barack comes to her defense—”She’s fine. She looks good,” he says—and prefers her without makeup or hairdo. “He doesn’t believe in frills,” says Michelle.

Long gone are the days when Michelle and Barack tried to split household chores. “I was doing the checkbook, the house and car repairs, the grocery shopping,” says Barack. “I would sometimes do the laundry, although not fold.” “Which is really pretty useless,” says Michelle. She’s only teasing; she knows he has the future of the family—and of the country—on his mind. “It’s not enough that we can provide our own kids with a healthy lifestyle,” she says. “If they’re not living in a world where other children have the same advantages, I start worrying about everybody’s kids.”

Malia and Sasha have been to the White House once before, in 2005. They were bored, Michelle says, until President Bush’s dog Barney showed up and they ran with him on the South Lawn. “They have a wonderful life in Chicago,” says Barack. “So I’m sure there’s a part of them that won’t be heartbroken if things don’t work out.” Whether their dad is home or not, many mornings the girls get into their parents’ bed, says Michelle. “I turn on the lights so we’re sort of waking up. And we talk. We talk about Daddy being President, about adolescence, about the questions they have.”

Now that Barack is constantly on the road, he says he misses those morning confabs, “Although I have to admit that sometimes, because I’m more of the night owl, I wasn’t always a full participant in these conversations. I’d sort of lie there …” “A dead body,” pipes in Michelle, completing his sentence. Whether Sasha and Malia end up history-making first daughters or two nice young women from Chicago, the Obamas are confident the experience will be good for the girls and for their own 15-year marriage. “Time and love and sacrifice and struggles make you stronger,” says Michelle. To which Barack adds, “If I ever thought this was ruining my family, I wouldn’t do it.”

For more of PEOPLE’s interview with the Obamas, go to

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