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REMARKS BY:	DONNA E. SHALALA, SECRETARY OF HEALTH AND HUMAN SERVICES
PLACE:		The OECD Forum for the Future, Berlin, Germany
DATE:		December  6, 1999

When you're young, history is about someone else's life - not yours. Well, I'm not quite as young as I used to be - and today I feel the sweep of history. Like many of you, I lived through the Cold War. I remember President Kennedy standing at the Berlin Wall. I remember the Prague Spring. I remember the trauma over medium range missiles. And, of course, I remember when the wall came down. So coming to Berlin, the re-united capital of Germany, I am reminded that with hard work and patience, the human longing for justice will prevail.

I mentioned some of the history we've lived through together.

But if you want a breathtaking view of how much Europe has changed in the last 100 years, take a look at Professor John Keegan's new history of World War I. In December 1899, if two diplomats were strolling down the streets of Berlin talking about "European integration," they would have meant something very different than we mean in December 1999. Europe was integrated the old fashioned way - through competing monarchies tied by blood, and interlocking alliances capable of igniting a war at a moment's notice.

World War I came and nothing has been the same since.

But let me say this: Through all the terrible pain this continent has suffered since the last fin de siecle, something extraordinary has risen from the ashes - the integration of civic ideals. Ten years ago, democracy was on the march. Today, a shared outlook about social policy is on the march.

I want to be clear: Democracy must never take a backseat to economics. Liberty is a virtue in its own right, and the notion that it should be compromised - let alone sacrificed - on the altar of social reform is both dangerous and self-defeating. Free expression - even more than free markets - is prosperity's nurturing soil.

This is not just a lesson for Europe. Through painful battles, first for women's suffrage, then for civil rights, and now for people with disabilities, the United States spent the 20th century remaking our political culture. Like you, we struggled to overcome. And like you, when the dust settled - and we woke up to a more humane society - we looked around and saw there was more work to be done.

Which brings me back to our shared outlook on social policy. While democracy at this fin de siecle is stronger than ever - the battle to reduce poverty, support families, educate children, protect public health, and harness technology for the common good goes on. For most of the past two decades, the right and the left pushed their competing - and nearly irreconcilable - strategies for how to win this battle.

The right said government is never the answer because the free market is always more efficient at picking winners. The left said government is the only answer because the free market is always less efficient at protecting losers. Nearly every Western democracy has lived through this philosophical clash. The moment of truth for the United States came in 1995, when the Republicans shut down the government, and President Clinton stood his ground in order to protect not only our social safety net - but our values.

Since then, those values have come into sharp relief. They are personal responsibility, equal opportunity and an inclusive community, or in the felicitous words of both President Clinton and Prime Minister Blair - we're offering not a hand out, but a hand up.

The point is that we are finding a middle ground between government as overlord - taking care of everything, and government as potted plant - taking care of nothing. Some in Europe and the United States have called this the Third Way. Others, like Julian Le Grand of the London School of Economics, prefer the eponym, Cora - for community, opportunity, responsibility and accountability. President Clinton noted last month in Florence that we have the chance to create a new social policy that will draw millions of poor families into the economic mainstream. In the United States, we have the lowest unemployment rate in 30 years. The lowest inflation rate in 30 years. The lowest welfare rolls in 30 years. And the lowest poverty rate in 30 years.

We have also turned conventional fiscal wisdom on its head. Instead of deficits as far as the eye can see - which is what most economists were predicting as recently as five years ago, we now have our first back- to-back surpluses, a trend that will continue well into the future. In the meantime, the new brainpower economy of computers, the Internet and global free trade has created enormous wealth - and new opportunities for anyone with cutting edge skills. So when it comes to empowering millions of people still living on the economic margins, Hillel's question is still the right one: If not now, when?

I don't have all the answers. But I understand what Shakespeare meant when he wrote in Julius Caesar, "The fault, dear Brutus, is not in our stars, but in ourselves."

In the United States we've proven that we can move people from welfare to work. That we can create tax incentives that help lift working families out of poverty. That we can work in partnership with the private sector. That we can expand health care coverage for children. That we can lower teen pregnancy rates and infant mortality, and raise immunization rates for preventable childhood diseases.

Still, if we are to strengthen our economies through social policies that educate people and put them to work, we must face up to the serious challenges that lie ahead. We cannot leave it to the stars - or to future generations. It is up to us - to this generation of leaders.

What are the challenges that will confront us in the next century?

Let me start with aging. The graying of both Europe and the United States is underway. In Europe, many countries are at - or near - zero population growth. In developed countries, living to 100 will soon become commonplace. In the next 30 years, the number of people in the United States over 65 will nearly double, and citizens over 65 will go from 13 percent of the total population in 1990 to 22 percent in 2030.

We see the same trend across the developed world. In Italy, the population over 65 is expected to climb from 15 percent of the total in 1990 to twice that in 2030. In Germany, the projected rise is from 15 percent to 28 percent. And in Japan, from 12 percent to 26 percent. So my friends: You and I may be getting older. But a lot of our fellow countrymen and countrywomen are too.

That's why I want to repeat what I said at our meeting in Paris in 1998. We are heading for a future with millions of older - but still productive - citizens. So we must craft policies that focus on active aging - which means shaping useful and rewarding lives for healthy seniors.

We must also keep a close eye on the bottom line. All of us face a future where fewer and fewer workers will be paying into national pension systems meant to cover more and more retirees. The day of budget reckoning is coming - and the sooner we prepare, the better.

National pension systems like our Social Security have greatly reduced poverty among the elderly. But poverty still is very much with us.

That is our second challenge.

As I mentioned, the United States is in a period of unprecedented prosperity, with a national unemployment rate of 4.1 percent, and millions of families finding employment and opportunity for the first time in their lives. But millions more are still waiting their turn to climb onto the ladder of economic opportunity. On our Pine Ridge Indian reservation, 73 percent of adults are unemployed. In many urban and rural communities in the United States, the unemployment rate is more than double the national average.

As for poverty, almost one in five American children are in poverty. According to Prime Minister Blair, in the United Kingdom, the number is one in three. Using 40 percent of median income as a standard measure for poverty, the most recent available data tells us that the overall poverty rate in the United States is approximately 14 percent. In the United Kingdom, the rate is 15 percent. In Germany, 6 percent. In Canada, 9 percent. And in Australia, 23 percent. So notwithstanding today's prosperity, there is still poverty in the midst of plenty throughout the developed world.

Poverty is an even bigger calamity in the developing world. That's why debt relief must continue to be a priority. Instead of demanding every last Dollar, Pound, Franc, Deutchmark and Guilder in interest payments, we will all be better off if poor countries invest their limited resources in schools, infrastructure and jobs.

The biggest - and in some cases only - reason that some of our citizens are left behind is that they simply do not have the skills they need to succeed.

The skills gap: That's our third challenge.

Technology and the Internet are changing what sells and why. Workers or companies that stand pat are simply going to be run over. Even Japan is discovering that's its traditional policy of "lifetime employment" is not tenable in a global marketplace. Part of the solution is worker retraining. But, frankly, we must also close the digital divide.

Our leaders talk frequently about the importance of getting every school wired to the Internet. Millions of poor children attend schools that are behind the times in the way they're organized and funded. These children must not bear the additional burden of being shut out of the computer revolution. This is not just a matter of fairness. It's a matter of smart social policy. These children will either have what it takes to compete in the global marketplace, or their despair - rooted in lost promise and dreams deferred - will drag us all down.

And what about the parents of these children?

That's challenge four: Reducing income inequality.

The right claims this is nothing more than a pipe dream, and the left claims this is nothing less than a first principle. We must navigate our way between both claims. By raising the minimum wage. By lowering taxes on the working poor. And by making the first two years of public college essentially free - the United States is giving a moderate boost to incomes at the low end, even as incomes soar at the high- end.

Whether you're a parent in Berlin, or Budapest, or Bristol or Boston, there is no easy way to balance work and family.

As the President said in Florence, virtually every European country has done a better job than the United States in supporting working families. For example, we've spent years trying to convince our Congress that the lack of affordable, accessible, high quality childcare is an American nightmare. We've made only limited progress. But we're not giving up. In the meantime, the President proposes expanding our family and medical leave by allowing parents to take money out of their unemployment insurance while on leave.

My fifth challenge is the borderless community.

This is really a public health challenge. The OECD may represent the world's developed countries - but disease and terrorism do not recognize borders. Last Wednesday was World AIDS Day. I emphasize "world." India already has 5 million HIV cases. Africa is heading for a generation of AIDS orphans. Eastern Europe is one of the fastest growing areas for new infections. We must come up with a better system of HIV surveillance. We must make drugs cheaper and more accessible. And we must continue esearch to find an AIDS vaccine.

We also have to wake up to the real threat of bio-terrorism. There was a time when this was science fiction. Now, it's science fact. But if we use our collective ingenuity, the gas mask - symbol of how this century started - won't become a symbol for how it ended.

My last challenge - number six - I offer with Kosovo and Northern Ireland in mind.

If we don't accomplish anything else in the next century, let's at least accomplish this: The end - once and for all - of racial, religious and ethnic hatred. Like all of you, I have traveled the world. I can tell you, no nation has escaped this curse. And no nation can rest until it does.

In his famous poem "The Second Coming," the great Irish poet William Butler Yeats predicted that `the center will not hold.' Despite the terrible cost in lives and treasure over the last century - or perhaps because of it - the center did hold.

Now at the dawn of the year 2000, we hold in our hands - the second chance.

We need to grab that chance - by strengthening the center of our politics, and by working to make the next century one of economic justice, social development and peace.

Thank you.