Thank you. Good afternoon. It's a pleasure to be with all of you. Mayor Dennis Archer, thank you very much for the kind introduction, and also thank you, Mayor Archer, for showing this country how beautiful a city can be, and how much can be done with a city when you have the right leadership, and the right talent and the right direction, thank you very much. (APPLAUSE).

Mayor Knight, thank you very much for your leadership. It's a pleasure to be with Don Don Borut, Mayor Menino and so many Mayors and City Council people who I have had the opportunity to work with. I want my first two words to be Secretary Daley's last two words - thank you. Thank you for what you do.

Cities are in a totally different place then they were just seven years ago, because there was a new breed of leadership - a more professional city government that addressed these issues differently. And this nation now feels differently about cities, about the potential of cities. That is thanks to the people in this room, and it's been my pleasure to work with all of you. Thank you very much. (APPLAUSE).

Coming to the microphone after you've heard from Janet Reno, Secretary Daley, and the President, it reminds me of that old line that everything has been said, just not everybody has said it. (Laughter). Let me try to say it a little differently and at least with a different accent than you've heard before. (Laughter).

We are public servants, and I think the challenge of public service is to respond to the need of that moment, both in terms of challenges and in terms of opportunities. And we truly have an opportunity today - we are present at this window in history, and I think would be a shame to squander it. You heard the President talk about the progress this nation has been made. But I've been at HUD seven years, and "cities" are at a phenomenally different place, a dramatically a different place then they were just seven years ago.

The economy is at a different place then it was. Yes, we still have problems, but, boy, we have an opportunity like we haven't had before. We have that strong economy going, the longest economic expansion in the history of the nation. We have 21 million new jobs, the unemployment rate is down. Cities are working better. But how do we now seize this moment to address the issues that still need to be addressed?

Let's not kid ourselves. We do celebrate the success, but that is not to say that things are perfect. And that is not to say that a prudent force wouldn't say, let's take this moment in history, and let's take this strength and use the strength to shore up the liabilities. Let's take this great economy, let's take this moment in history and use this moment to bring cities back to a point where, when the economy turns - and the economy will turn - when the economy turns, the cities will be strong, economically and socially.

Before we can do anything, we at HUD had to start by getting our own house in order. HUD, before it could be a partner with you - an effective, intelligent partner - had a lot of work to do. We did that in the first two, three years. We did nothing but close the door and fix our own house.

We downsized 30 percent, and productivity actually went up. We got out of the office buildings, and we opened storefront offices - we are now at ground level. We brought in a new type of employee who came from local government, who came from not-for-profits, whose attitude was to get to yes, not how to get to no.

We tried to change the attitude. We did little things - like we went out for the first time in history and inspected the HUD portfolio. Sounds like a radical concept. Believe it or not, HUD had never inspected its own portfolio. We went out and inspected 44,000 projects, and I'm proud to be able to tell you today that HUD is no longer in the business of subsidizing slum lords. We're not taking public dollars (APPLAUSE), and sending them to people who misspend it.

We then took public housing, which in most parts of the nation works very well, but in some parts fail. And where it's failed, where we built overly concentrated complexes, where we built warehouses for the poor that weren't going to work, we literally have gone back and we've blown them up, rather than sinking more and more money into failed public housing decade after decade. Blow it up, tear it down, and build it right the first time. Build townhouses, build communities, mixed-income, mixed-use. Built communities that move people into self-sufficiency. We call it the Hope VI Program.

We have stopped the loss of a number of Section 8 projects. We were losing more and more Section 8 projects every year - we stopped that. And we've taken something which is called the HUD inventory, where FHA owns homes, single-family homes, which were very often a blight on the community. We got plenty of calls from cities who said, your property, the house that HUD owns, that FHA owns, is actually a problem in the community. And we said first, we're going to sell it to police officers at a 50 percent discount - move it quickly, bring police, police officers into the community. We call it the Officer Next Door Program.

We then said we're going to take the inventory and offer it to teachers. I'm going to announce a program tomorrow, the Teacher Next Door Program. If you're a state-certified teacher, you can buy a HUD house at 50 percent of appraised value, believe it or not. Let's get those police officers in the community. let's get the teachers in the community. (APPLAUSE).

And then I had an idea from an unlikely source - Congressman Kasich, who is an unlikely source for Secretary Cuomo to be doing business with. But he actually had an idea, he said, you know, Cuomo, that HUD could have these homes all over the country that wind up being a burden on the local government, is really a sin. You don't get it, Cuomo, you're too Washington-oriented. Everything is in the community. So I bit my lip in that immediate impulse to argue, and I said, maybe you have something. And two weeks ago we announced the Good Neighbor Program which says this: if after six months, after all the discounts, after the Officer Next Door, the Teacher Next Door, after six months HUD has not sold the house, we will give it to the local government for one dollar. (APPLAUSE).

So HUD's house is in order. And this year, now that HUD is working better, President Clinton has provided HUD with his proposed budget for this year - HUD's best budget in 20 years, a $6 billion dollar increase. Every program goes up, to give you the resources you need to do the job you have to do, primarily focusing on economic development and the transformation. Because many cities in this country, two out of five cities in this country - two out of five cities in this country - are smaller, poorer, or have fewer jobs than just 20 years ago. Two out of five cities.

Why? Because as the economy is sorting out, many cities are losing their traditional economic rationale. It's actually more of a problem for the medium and smaller cities. The larger cities would diversify, they are doing all right, but the smaller and medium-size cities are struggling through this economic transformation. It's one thing to talk about e-commerce, but if all you did was build steel and you had steel mills like Buffalo, or you manufactured rubber like Akron, it's not that easy to make a transformation.

You need a plan, you need a vision, but then you need someone to help, and that's where HUD has been filling that need over the past few years. And the President wants to do more.

He talks about his New Markets agenda, and the Empowerment Zones, and brown fields. At least bring the city to an equal playing field with the green field. We're trying to bring business back there. (APPLAUSE). You're never going to get a private business to come in to redevelopment land if it's more costly than developing a green field. Tthat's what the brown fields program is. We propose to to raise it $50 million, and it will make a real difference.

The CDBG Program, which in my opinion is the quintessential program - national goals, local means - the President would effectively raise that by $250 million. (APPLAUSE).

We need to do more for affordable housing. We have the highest need for affordable housing in history today. Why? Because the economy is so strong it's actually driving up the rents. It's the story in Silicon Valley, where you can make over $100,000 a year and you can't find affordable housing, because the market is that high - different definition of affordable housing, but it is a problem nonetheless. The Section 8 program answers that. The President has proposed 120,000 new Section 8 vouchers to provide a rental subsidy in markets across the country.

We've been doing more on affordable homeownership with the FHA, which this year announced a $5 billion dollar value above estimates, $5 billion more, which the President said he wants to invest in affordable housing. And the greatest difference we'll make in affordable housing, believe it or not, is we recently raised the affordable housing goal. The affordable housing goal for Fannie Mae and Freddie Mac, are the number of loans that they must buy which are "affordable" and in "cities". The Federal Government sets that number, and Fannie Mae then buys that number. We raised that goal this year from 42 percent of Fannie Mae's and Freddie Mac's portfolio to 50 percent of the portfolio. That will be a $500 billion increase in the next ten years on affordable mortgages and mortgages in your cities, and that's going to make a real difference. (APPLAUSE).

We need to do more, follow the lead of Mayor Daley and Mayor Menino, and do more on the education system, because as long as a better education system is in the outlying suburb, we will continue to lose families. We need to do more on public safety. You have done a phenomenal job bringing down the crime rate. But we need to do more. The President has talked about gun buyback programs. We have one at HUD, there are 80 cities signed up to buy back 50,000 guns, 50,000 guns off the city streets, out of houses where they are unwanted, and we need to do more.

We need to do more for the environment. We now consume 7,000 acres of green space a week, 1,000 acres per day. We are literally eating the planet. We need to do something about it. We need to change the American paradigm. For too many years the paradigm was John Wayne - go west, move out, form your own home, your own backyard, two-car garage, a patio, and your barbecue. That was the American dream.

We need to start to change that paradigm and talk about redeveloping the older suburbs, and redeveloping cities, rather than adding another ring on the concentric circle which has already gone out too far. (APPLAUSE). We need to change the paradigm ourselves and the local government paradigm, where everything was the line on the map. Everything was the boundary, the line between the city and the suburb, or the county and the next county.

We have to blur those lines and have the intelligence to come up with metropolitan strategies, regional strategies, because the lines don't mean what they did at one time. And unless the governments can work together, we can never expect the people to work together. (APPLAUSE).

And the last point that I would make that we need to work on, is the point that the President made, the point that Mayor Knight made, the issue of race. If I've learned anything in seven years, with all this growth, with all this economic excellence, with all the new professionals in local government, we have made so little progress on the issue of race. (APPLAUSE). It doesn't feel like it's getting better. If anything it feels like it's getting worse, because the challenge is getting harder. It's not just about blacks and whites anymore. It's now blacks, and whites, and browns, and 100 different languages spoken in many schools systems. And we're getting more and more immigrants. By 2050, we'll be a majority minority nation.

And I am convinced if we do not learn how to deal with this issue it will beat us, ultimately. We've conquered everything else, all sorts of technological advantages, but can we actually conquer this issue, which has been with us from day one? It has been with us from the moment we were conceived. It was the rationale of the conception. It was the rationale to the birth of the nation. That was the premise - that we didn't have to have a common heritage or a common color. That you could forge a nation by putting up a sign and say, come one, come all, it doesn't matter what your religion, what your race. If you're willing to work hard, and you're willing to do better for your family and your community, you can make it here in America, that's the sign that the Statute of Liberty held up. And people came and they came across oceans because of that promise. And the question is now can we make it, can you vindicate that promise. We've tried running, we've tried hiding, we've tried isolation - that's what the great highways were for at one time. Move away from the density, move away from each other, move out and out and out. That's how we started this concentric circle madness. The Internet can now do it for us. They talk about the home-centered society. You can have the Internet, you can have e-mail, you can stay at home. You can shop from the Internet, correspond with your friends from the Internet, you can date on the Internet, and you can get married on the Internet - you never have to see anyone. (Laughter). A new concept. (Laughter). All these great devices to keep us isolated, to keep us individualistic.

But the question is, can we be pluralist. That's the question for the nation. That question is going to be answered in our nation's cities, because cities are the proving grounds. Cities are where we come together. You can't hide in a city. We're elbow-to-elbow. We're right next to each other, and we either take our differences and make them a source of strength, or they will defeat us.

I say the cities can be the looking glass to a future that says, yes, we're economically stronger, yes, we're socially stronger - but we're also stronger as a people, we're also stronger as a community, we're also more interconnected, we're also more interrelated. That the founding fathers were right when they said, E Pluribus Unum, out of many one., That's what the cities are going to show. Work together will make it happen. Thank you and God bless. (APPLAUSE).