'AN AGE OF POSSIBILITY'\In his address, President Clinton asks Congress and the American\people to promote economic security for troubled workers, improve\education, fight crime and protect the environment.\STATE OF THE UNION EXCERPTS.

The following is an excerpted text of President Clinton's State of the Union address Tuesday night:

Mr. Speaker, Mr. Vice President, members of the 104th Congress, distinguished guests, my fellow Americans all across our land.

Let me begin by saying to our men and women in uniform around the world, and especially those helping peace take root in Bosnia, and to their families: I thank you. America is very, very proud of you.

My duty tonight is to report on the state of the union, not the state of our government, but of our American community, and to set forth our responsibilities - in the words of our founders - to form a "more perfect union."

The state of the union is strong.

Our economy is the healthiest it has been in three decades. We have the lowest combined rate of unemployment and inflation in 27 years.

We live in an age of possibility. A hundred years ago we moved from farm to factory. Now we move to an age of technology, information and global competition. These changes have opened vast new opportunities for our people, but they have also presented them with stiff challenges. While more Americans are living better lives, too many of our fellow citizens are working harder to just keep up, in search of greater security for their families.

We must answer three fundamental questions: First, how do we make the American dream of opportunity a reality for all who are willing to work for it? Second, how do we preserve our old and enduring values as we move into the future? And third, how do we meet these challenges together, as one America?

We know big government does not have all the answers. We know there's not a program for every problem. We know and we have worked to give the American people a smaller, less bureaucratic government in Washington. And we have to give the American people one that lives within its means. The era of big government is over.

To improve the state of our union, we must all ask more of ourselves; we must expect more of each other; and we must face our challenges together.

Here, in this place, our responsibility begins with balancing the budget in a way that is fair to all Americans. There is now broad bipartisan agreement that permanent deficit spending must come to an end.

Tonight, I want to speak about the challenges we face as a people.

Our first challenge is to cherish our children and strengthen American families.

Families are the foundation of American life. If we have stronger families, we will have a stronger America.

I say to those on welfare, and especially to those who have been trapped on welfare for a long time: For too long our welfare system has undermined the values of family and work instead of supporting them. The Congress and I are near agreement on sweeping welfare reform. We agree on time limits, tough work requirements and the toughest possible child-support reinforcement. But I believe we must also provide child care so mothers can go to work without worrying about what is happening to their children. I challenge this Congress to send me a bipartisan welfare reform that will really move people from welfare to work and do right by our children. I will sign it immediately.

Our second challenge is to provide Americans with the educational opportunities we need for a new century.

Every classroom in America must be connected to the information superhighway, with computers, good software and well-trained teachers. We are working with the telecommunications industry, educators and parents to connect 20 percent of California's classrooms by this spring, and every classroom and library in the entire United States by the year 2000. I ask Congress to support our education-technology initiative so we make this national partnership successful.

Our third challenge is to help every American who is willing to work for it, achieve economic security in this new age.

More and more Americans are working hard without a raise. Congress sets the minimum wage. Within a year, the minimum wage will fall to a 40-year low in purchasing power. $4.25 an hour is no longer a minimum wage. But millions of Americans and their children are trying to live on it. I challenge you to raise their minimum wage.

Finally, if our working families are going to succeed in the new economy, they must be able to buy health insurance policies that they do not lose when they change jobs or when someone in their family gets sick. Over the past two years, over 1 million Americans in working families have lost their health insurance. We have to do more to make health care available to every American. And Congress should start by passing the bipartisan bill sponsored by Senator Kennedy and Senator Kassebaum that would require insurance companies to stop dropping people when they switch jobs, stop denying coverage for pre-existing conditions. Let's all do that.

And even as we enact savings in these programs we must have a common commitment to preserve the basic protections Medicare and Medicaid give, not just to the poor, but people in working families, including children, people with disabilities, people with AIDS, senior citizens in nursing homes. In the past three years we have saved $15 billion just by fighting health care fraud and abuse. We have all agreed to save much more. We have all agreed to stabilize the Medicare trust fund. But we must not abandon our fundamental obligations to the people who need Medicare and Medicaid. America cannot become stronger if they become weaker.

Our fourth great challenge is to take our streets back from crime, gangs and drugs.

At last, we have begun to find the way to reduce crime - forming community partnerships with local police forces to catch criminals and to prevent crime. This strategy, called community policing, is clearly working. Violent crime is coming down all across America.

Our fifth challenge: to leave our environment safe and clean for the next generation.

Because of a generation of bipartisan effort, we do have cleaner water and air. Lead levels in children's blood has been cut by 70 percent, and toxic emissions from factories cut in half. Lake Erie was dead. Now it is a thriving resource.

Our sixth challenge is to maintain America's leadership in the fight for freedom and peace throughout the world.

Because of American leadership, more people than ever before live free and at peace and Americans have known 50 years of prosperity and security. We owe thanks especially to our veterans of World War II. I would like to say to Sen. Bob Dole and to all others in this chamber who fought in World War II and to all others on both sides of the aisle who have fought bravely in all our conflicts since, I salute your service and so do the American people.

All over the world, even after the Cold War, people still look to us, and trust us to help them seek the blessings of peace and freedom.

My fellow Americans the six challenges I have just discussed are for all of us. Our seventh challenge is really America's challenge to those of us in this hallowed hall tonight - to reinvent our government and make our democracy work for them.

As we move into an era of balanced budgets and smaller government, we must work in new ways to enable people to make the most of their own lives. We are helping America's communities, not with more bureaucracy, but with more opportunities. Through our successful empowerment zones and community development banks we're helping people to find jobs, to start businesses.

But there are some areas that the federal government should not leave and should address and address strongly. One of these is the problem of illegal immigration. After years and years of neglect, this administration has taken a strong stand to stiffen the protection on our borders. We are increasing border patrols by 50 percent. We are increasing inspections to prevent the hiring of illegal immigrants.

And tonight, I announce I will sign an executive order to deny federal contracts to businesses that hire illegal immigrants. Let me be very clear about this: We are still a nation of immigrants, we should be proud of it. We should honor every legal immigrant here working hard to be a good citizen, working hard to become a new citizen. But we are also a nation of laws.

I know that this evening I have asked a lot of Congress and even more from America. But I am confident. When Americans work together in their homes, their schools, their churches, their synagogues, their civic groups or at work, they can meet any challenge.

I say again: The era of big government is over. But we can't go back to the era of fending for yourself. We have to go forward, to the era of working together - as a community, as a team, as one America - with all of us reaching across these lines that divide us. The division, the discrimination, the rancor, we have to reach across it to find common ground. We have got to work together if we want America to work.

America has always sought and always risen to every challenge. Who would say that having come so far together we will not go forward from here? Who would say that this age of possibility is not for all Americans? Our country is and always has been a great and good nation, but the best is yet to come if we all do our part.

Thank you, God bless you, and God bless the United States of America.

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Photo President Clinton greets House Speaker Newt Gingrich prior to Tuesday's address. Associated Press