SECRETARY ALBRIGHT: Thank you very much, Mr. Chairman, Senator Biden and members of the Committee. It has been mentioned that I am entering my last year as Secretary of State in the Clinton Administration and I obviously have done a lot of reflecting about what has been done and what still needs to be done, and a lot does have to happen. I have been a Senate staffer, I have been a professor, I have been a campaign adviser, I have been a talking head, I have been a wannabe, I have been Ambassador to the United Nations and now Secretary of State.

I have not been elected to a public office, which I regret, and some of the fellow Foreign Ministers around the world who are members of parliamentary governments always are reminding me about their very close contact with voters. So I have tried to make up for that by traveling America as much as I've traveled the world because I think that it's very important to know what the American people think.

Over the last seven years, my previous ideas and criticisms have been tested on a daily basis by actually having to make some decisions, and I am pleased to say that, from my own perspective, I believe that I have maintained a consistent view about the importance of America's leading role in the world. My view has really been informed by my personal gratitude to the American people for the role that America took during World War II and the Cold War, and I believe, therefore, in an activist, engaged America.

I've done a lot of reading and listening, and there is a lot of talk about the US role and American power and about priorities -- obviously a subject that is part of my daily bread. I believe that we have the strongest military and we have to keep it, and we have to have an equally strong diplomatic service.

But I also think, out of my conversations with the American people, which you have also and in a much more intensive way, I don't think that they want us to forget about our humanity and humanitarian concerns or principles and our values. And, therefore, I believe in the goodness of American power, and our priorities have to reflect those principles and values. I thought I would say that by way of context for the budget and priorities that I am going to set out today.

I am really very pleased to have a chance, once again, to be here and I do hope it's not my last appearance this year because I think these are always very good exchanges. During the past three years, I have been honored to work with you in what has been a time of progress and accomplishment for America. I do believe our sense of common purpose has contributed to the fact that our nation has entered the new century strong and respected, prosperous and at peace.

Together with allies and partners, we have helped NATO to gain new members and train for new missions, and I think we've done a lot of work on that here in this Committee. We have worked for peace in Northern Ireland and the Middle East, spurred recovery in Bosnia, and ended large-scale strife in Kosovo and East Timor. We have backed nuclear stability and democratic reforms in the former Soviet Union. We have carried out a sweeping and successful restructuring of our foreign affairs agency. I do believe, Mr. Chairman, that we can be very proud of that work. We have enacted a bipartisan plan to begin paying down our UN obligations -- another very important thing that we've done together.

Our ability to work together stems from our shared purpose, but also from the more personal bonds reflected in last year's State Department Authorization Bill, which as you pointed out Mr. Chairman, was named for Admiral Bud Nance and Meg Donovan.

In that spirit, I also want to thank this Committee for its speed and fairness in approving nominations, and very much second what Senator Biden said, hoping that we can get a number of appointments done this year. It's very important.

I am told this is an election year, but that doesn't matter to me personally because when I joined the State Department, as I told many of you, I had all my partisan instincts surgically removed. I only mention it because some say it's harder for the Executive and Legislative branches to work together in an even-numbered year. But we all know that the world does not stop, even for American elections, and we have to work together steadily and agreeably -- even when we disagree -- to seize opportunities and protect our interests against 21st century perils.

My written statement, Mr. Chairman, is quite lengthy and describes our policies around the world. Since I know you will read it -- perhaps at bedtime -- I promise not to recite it. Instead, I will confine my oral remarks to a few key issues where it is most urgent that we work cooperatively this year.

The first is in supporting democracy. I emphasize this because the democratic trends of the past decade are by no means irreversible. Amidst progress on every continent, we also find transitions that have stalled due to economic crisis, ethnic division or rising crime. There are a number of elected governments that are democratic in name only, practicing not "government of the people" but rather stealing from the people their riches and rights.

Our task this year is to renew democratic momentum, not out of high mindedness alone, but because democratic growth is part of the answer to many of the challenges -- economic, political and military -- that we face.

For example, we have an urgent and obvious stake in aiding Colombian President Pastrana and his plan to rescue his country -- and thereby help rescue ours -- from the scourge of cocaine.

Nigeria's future development will determine whether it is a source of chaos and corruption or a driving force for stability and progress throughout West Africa.

Indonesia has long been a leader in Southeast Asia. It now has a chance, although under severe stress, to become a model of multi-ethnic democracy, as well.

Aside from Russia, Ukraine is the largest and most influential of the New Independent States. The whole region will be affected by whether it slides backward, or continues up the democratic path.

The President's budget proposes significant investments in each of these four key democracies and in promoting democratic practices and values worldwide. Support for freedom is in the proudest tradition, from Washington and Jefferson, to Reagan and Clinton. I ask your help in getting a good start on what I hope will be known, with a small "d," a democratic century.

Second, I ask your support for peace.

In the Middle East, we will need your steady backing as we work with the parties to find the road to a just, lasting and comprehensive settlement. The legacy of mistrust in the region is hard to overcome and the enemies of peace remain virulent and active. But never before has the logic of peace been so compelling or the opportunity for peace so clear. At this critical time, America's commitment to progress on all tracks must remain rock solid.

On the Korean Peninsula, we have reviewed our policy over the past year in close coordination with Seoul and our indispensable ally, Japan. We are backing President Kim Dae-jung's policy of engagement with the North, and have expressed a willingness to improve our own relations with Pyongyang while it addresses our concerns about its missile and nuclear weapons-associated activities.

In Africa, the Lusaka Agreement provides a basis for ending the war in the Congo, and we have challenged the parties to live up to their obligations under it. As they do, we can help by endorsing a carefully-designed U.N. mission.

We have learned much over the past decade about the "do's and don'ts" of such missions, and we must apply these lessons firmly and realistically in this case. But we must also be resolute in our determination to help the Congo move from war to peace.

Third, I ask your support for promoting the further integration of countries into the economic, political and security components of the international system. This is an overarching goal that we pursue in diverse areas by a variety of means.

For example, last July, following the conflict in Kosovo, we entered into a Stability Pact covering all Southeast Europe. Our goal is to work with local leaders and populations to integrate this area of chronic instability into the continent's democratic mainstream.

We have no illusions about the difficulty of this task. It is literally to transform the patterns of history. But such patterns have been transformed before. Despite all the frustrations and setbacks, a new reality is slowly taking shape.

Consider the region's hardest case, the former Yugoslavia. Yesterday, a new President was elected in Croatia, pledged to tolerance and economic reform. Since Dayton, elections have been held at all levels in Bosnia. Slovenia is democratic. In Macedonia, there was a peaceful transfer of power last year.

In Montenegro, President Djukanovic is championing democracy. And in Serbia, more and more people are asking when they, too, will be given the right to choose their leaders freely and without fear.

Finally, in Kosovo, our challenge is to prepare the way for democracy by showing the same determination to build peace as we did to end the conflict. I ask your support for the President's requests for Kosovo and the region. I cannot imagine a better gift to the future than a democratic and stable Southeast Europe.

With your permission, Mr. Chairman, I would like to enlarge upon this point for just a minute. We all know that the politics of hate in Europe exacted an enormous price during the last century. It dramatically altered the course of millions of lives, and prematurely and tragically ended many millions more.

After what we have witnessed, not even elections can validate intolerance. For democracy is based on respect for the rights of every individual. Those who love freedom must be vigilant in defending it against those who threaten it - even those who would steal its very name. At the same time, we must recognize that there are apostles of hate in every country.

Today, I hope we will renew our vow not simply to remember the truth about the Holocaust, but also our duty to rebut those who prefer to forget, distort or deny it. Let us renew our pledge to prevent genocide, oppose ethnic cleansing, and protect the rights of all, including minorities. These are standards which every country in the Euro-Atlantic Community and beyond should observe, and which every country should strive to unite others around.

Let us, then, talk sense to the people of Austria. Let us expand our dialogue with them, while holding their leaders accountable to the principles of pluralism and tolerance they have just explicitly reaffirmed. Let our Community stay focused on the opportunities and challenges that exist in Southeast Europe by backing the promise of resources with their timely delivery in Kosovo and around the region.

Mr. Chairman and members of the Committee, when we talk about integration, we also talk about Russia and its relations with the West, which have been strained by political turmoil and conflict.

Over the past decade, the United States and Russia have overcome sharp differences to cooperate in the Balkans and on other issues of European security. This past week in Moscow, I emphasized America's desire to continue working with the Russians to curb proliferation, ensure the safe handling of nuclear materials, further reduce nuclear arsenals and find common ground on National Missile Defense.

I also said that Russia's integration could become isolation unless it ends its brutal tactics in Chechnya and pursues a political resolution of that conflict.

Another difficult but vital test of integration is in Asia, where it is in our interests to encourage China to participate more fully in the world economy and comply more rigorously with global norms.

In the year 2000, we will be consulting closely with Beijing on global and regional security issues, including proliferation. We support the protection of Tibet's heritage and will continue to urge Beijing to open a dialogue with the Dalai Lama. In Geneva, we will seek international support for a Resolution calling upon China to increase respect for human rights. We will continue to implement faithfully our obligations under the Taiwan Relations Act.

We will be asking Congress to support the Administration's agreement to bring China into the World Trade Organization by passing Permanent Normal Trade Relations. If we do not, we will risk losing the market access benefits of the agreement, and the right to enforce them through the WTO. We would also lose the opportunity to help move China further in the direction of openness and the rule of law.

I also ask you to support integration by helping us to assist others to participate more effectively in the economy of the 21st century. Specifically, I ask your backing for the varied and vital work of USAID, for the Africa Growth and Opportunity Act, the Caribbean Basin Initiative and the Southeast Europe Trade Preferences Act.

I ask your support for President Clinton's plan to provide debt relief for the most heavily indebted poor countries, and to increase our contributions to the fight against killer diseases, including HIV/AIDS.

And I ask your approval of the President's request for full funding, without unrelated restrictions, for international family planning, which reduces the number of abortions and saves human lives.

Finally, I ask your support for American leadership. Whether the challenge is protecting our citizens from international terror, or our environment from global climate change, America cannot lead without resources, nor be secure unless we lead.

Despite President Clinton's strong backing and bipartisan support from many of you, our foreign policy enters the 21st century living hand to mouth. No industrialized country contributes a smaller share of its wealth to overseas development. During the past decade alone, our rate of investment has declined by more than a half.

We also need resources to enhance the security of those who work in our diplomatic posts, both overseas and here at home. As the tragic Africa Embassy bombings of 1998 remind us, our people are on the frontlines for America every day and on every continent. They deserve -- for they have earned -- the same respect and care we accord our military personnel.

So I ask your support for the President's budget in its entirety. I do so with the clear understanding that the vast majority of the funds requested will be spent next year, under a new administration. The President's request has nothing to do with parties or personalities; it has everything to do with our nation's determination to protect our interests and promote our values.

I remind you that today, we devote only one penny out of every federal dollar we spend to our international affairs programs. But that single penny can make the difference between a future characterized by peace, rising prosperity and law, and a more uncertain future, in which our economy and security are always at risk, our peace of mind is always under assault, and American leadership is increasingly in doubt.

Mr. Chairman and members of the Committee, the dawn of the millennium has only intensified our awareness of the passage of time. We conduct much of our business with technologies that barely existed only a decade ago. The patterns of international relations that we lived with for so long have been turned upside down. And old friends have passed to a better place.

We live in a world that seems utterly transformed and that will not stop changing. No country is more comfortable in such a world that America, but we would be lost except for what has not changed -- and that is America's purpose. There are no final frontiers for America. We are not -- and have never been -- a status quo country. We have always believed in the future and that it can be made better than the past. We are doers.

In the year ahead, we have a chance to add another proud chapter in the history of American leadership in search of peace, in defense of freedom, on behalf of prosperity, and in the service to our collective boss, the American people. I have no doubt that in that quest, if we are united, we will succeed.

Thank you very much.