"I'm smart enough to understand that a Senate and a House dominated by Trent Lott and Newt Gingrich will not embrace a throw-the-money-at-the-problem-leftist solution; the New Deal era is dead," he said.

As a result, Kerry said that he favors the "empowerment" of local programs, such as Boys and Girls Clubs, YMCAs, Big Brother/Big Sister programs and "faith-based institutions."

During the question-and-answer period following his speech, Kerry was asked what incentives he would use to attract qualified, energetic teachers. "It's got to be economic. That's the reality today," he said.

Kerry also addressed the issue of campaign finance reform. While he said that it would take "a major scandal, at the level of Watergate," or a strict presidential mandate to pass any finance reform legislation, he said that the need was pressing.

"We ought to have a society where people can run for president based on their record, not on their huge bankroll," he said.

Asked about rumors of his own presidential ambitions, Kerry said he is contemplating a run for the White House in 2000.

"I am thinking seriously about running," he said. "I just went up to New Hampshire to dip my toes in the water, and it was quite warm."