Donna E. Shalala is balanced on the edge of a Cleveland hospital bed, where a 7-year-old boy is being treated for bone cancer. His parents, Glen and Cynthia Day, are asking her the hard questions about health care: Put simply, who will pay the bills?

Their son, Zach, smiles meekly at this visitor, who has swept into his room trailed by a knot of staff and cameras. He has lost all of his hair, his right leg has been amputated just above the knee and an IV is draining into his right arm.

Shalala sits beside him, holding herself still, but emanating intensity -- as if the energy of a bigger person has been compacted into her solid, five-foot frame. "You're worth every dime we spend on you," she says decisively. "Keep fighting." From behind her back, she produces a teddy bear and hands it to him.

But the new secretary for health and human services has no good answers for his parents, who worry that their insurance will be exhausted by the staggering hospital bills. Nor does she for dozens of other patients waiting down the hall, who tell her horror stories about their lack of insurance coverage, or how their insurance won't pay for the one treatment that could save their lives.

She offers this: "We've got a system that obviously doesn't work. ... All I can tell you is we're going to do our best."

There is a powerful irony in the moment, as Donna Shalala embraces what she calls her "awesome" responsibilities. Like many others in the Clinton administration, she was shaped by the '60s belief that government can solve the most challenging human problems. But in the corridors of this hospital, as in the corridors of HHS's massive headquarters building on Independence Avenue, her idealism confronts reality.

Shalala and her Cabinet colleagues have waited a dozen or more years for this chance. Now they are here, ready to go. But the cupboard is bare. The great spending days of the '60s are gone, replaced by a politics of austerity and a suspicion of government. And even if there were enough money to pay the health care bills for those who cannot, there still waits a punishing list of other demands: training and jobs for welfare mothers, AIDS, child support, drug abuse, urban blight.

Not that she's daunted by the limitations. Shalala describes the transition of power in Washington as a critical point in American history, a juncture of need and opportunity that calls for a great leap forward in social policy. Something akin to the creation of Social Security in 1935, which she calls the most sweeping advance in social service programs ever. This is the time and these are the people, she says of herself and her counterparts. It is time to make history. "We've spent our whole careers waiting for this moment," she says. "We better seize it."

Can she possibly fulfill her own mythic expectations?

Donna Shalala does know how to get things done -- with or without your help.

"She's a steamroller," said Michael Grebe, a conservative Republican on the board of regents at the University of Wisconsin, where Shalala served as chancellor. "She just runs over people. She's a very high-energy person who approaches problems with a frontal attack ... sometimes she leaves a few bodies in her wake," he said.

At the same time, Grebe rates Shalala as an effective chancellor. By many accounts, she has taken two huge institutions -- University of Wisconsin-Madison and Hunter College in New York, where she served as president -- and revitalized them. But it is almost as if the zeal and self-confidence that propels her also creates a momentum she cannot harness. She ends up negotiating her world like a force of nature, more tornado than gentle breeze. And sometimes that gets her into trouble.

After a few months on her new job, she has apparently become the first Cabinet member to stray from the White House's party line. Sources in the administration said White House officials, including Clinton, were annoyed with her when she announced without approval that the immigration ban on persons with HIV would be lifted, a regulatory change that Congress has since opposed. HHS spokeswoman Avis LaVelle countered that Shalala went through proper channels. Nevertheless, Shalala received an angry call from White House chief of staff Thomas F. McLarty, who scolded her over the matter, according to one White House official. She also angered the White House, administration sources said, when she announced without approval that FDA Administrator David Kessler would remain in his post. LaVelle said this too was a misunderstanding for which Shalala was not responsible.

If it is a show of independence, it is hardly the first time. In fact, Shalala's assertive streak can make her seem relentless. As a child in Cleveland, she once marched out after a dance recital to take a personal bow, waiting until she had the stage to herself. As an adult, she is known as a demanding boss with an imposing ego.

But Shalala is more complex than that, part steamroller, part sports coupe. The folklore among Madison students was that, after she banned smoking at the university, she would stalk the stadium tiers at athletic events looking for smokers. Her nickname, earned when she served as an assistant secretary at HUD in the Carter administration, is "Boom Boom." But she also knows how to charm: Donna Shalala on the football field, introducing kids to Bucky the Badger, the UW mascot. And many say she is genuinely compassionate: Donna Shalala sharing her chancellor's mansion for months with a North Dakota family whose daughter was in Madison for a liver transplant.

Above all, she is savvy. Grebe, whose conservative Republican politics clashed with Shalala's, believes she "either co-opted or neutralized" her natural critics in Madison -- the business community -- by her enormous success at fund-raising and by turning around the athletic department.

"I wonder, in my heart of hearts, if she was going to build a university from the ground up, if it would even have intercollegiate athletics," he said. "But when she arrived here and saw people attached importance to it, she jumped right on it."

She has been labeled the "high priestess of political correctness." Those critiquing the new administration say that Shalala, of all the Cabinet members, may be most likely to falter in her new role because she is most representative of the old-style liberal, most eager to find sweeping government solutions for the nation's problems, most caught in a mismatch of ideology and reality. Before her Senate confirmation, Hill Republicans named her as the most likely nominee to incite controversy because of her politics. And Rush Limbaugh, the conservative radio talk show host, airs a regular "Shalala update" -- accompanied with a takeoff on the Eric Clapton song "Layla": Shalala's as left as she can be ... spends her time hugging trees ... Shalayyyyyla.

Shalala, of course, rejects not only the accuracy of the labels, but any notion that she will be paralyzed, or even bothered much, by the obstacles before her. "I've been running institutions for almost 15 years," she said in her unvarnished, let's-cut-through-the-crap voice. "For the most part, I've had to cut and refocus, as opposed to adding." More important, she says, her philosophy about government has evolved: "There are limits to what you can spend."

"I did indeed start out as a flaming liberal," she said. "And I still have those values. But as an administrator, I've been seasoned. I didn't come here expecting additional resources.

"I was trained in graduate school to be a Cabinet officer in the Johnson administration," she said. "I was trained in life to be a Cabinet officer in the Clinton administration."

Born in 1941, she was raised in a close-knit, middle-class family through the post-World War II economic boom years. She was in the first class of Peace Corps volunteers, spent two years in Iran and returned to a liberal-minded graduate school in the midst of the anti-Vietnam protests. She says she smoked marijuana as a college student and traveled to Washington for peace demonstrations.

For all her professional seasoning, Shalala can still sound the misty-eyed idealist, painting her past and present in grandiose, quixotic terms. At the December news conference when Clinton announced her appointment, she thought back 30 years. "That was also a time of great hope," she said. "In fact, I remember writing on my Peace Corps application that I wanted to make a better world. I still have that dream."

But her professional life has brought a series of choices forcing her in ways, big and small, to compromise. In the 1970s, as a director of the Municipal Assistance Corp., the panel charged with rescuing New York City from its fiscal crisis, Shalala and the other directors proposed a long list of painful retrenchments, including new taxes and cuts in the work force.

It was a nightmare for Shalala and other liberals on the board, said Felix G. Rohatyn, the investment banker who still directs MAC. They all took a beating in the press. But Shalala was "rock solid," he said. "She understands there's no painless alternatives to anything."

In her most difficult decision at the University of Wisconsin, Shalala ruled against students who wanted her to ban ROTC from campus because it discriminated against gays. She agreed with the students, she said, but felt as chancellor she couldn't grant their demands because the only way for some students to attend college is through a ROTC scholarship.

It was the way she handled that confrontation that soured some students on her methods. One day she emerged from her office to face hundreds of protesters, stood before them and turned them down. Then she bought them pizza.

The students camped outside her office for six days before they moved to the Board of Regents office, where they were forcibly removed in an ugly confrontation that sent one student to the hospital with a broken rib. But it is not the broken rib or the six days of sleeping on a hard floor that the students regret. It is the pizza, because that image -- the benevolent leader buying food for her critics and thereby closing the gap between them -- has outlived much else about the protest.

"She totally co-opted us," said Jordan Marsh, a student government leader at the time. "That's what she's so good at. She was real smart. She was able to play both sides."

And she can be brittle in the face of criticism. Jason Bretzmann, who works with the student government, said Shalala blasted him in a telephone conversation last fall over testimony on college costs he was scheduled to present to a congressional committee.

"She pretty much started yelling from the get-go," Bretzmann said. "She didn't want me going out there {to Washington} and saying bad things about her university. She was trying to intimidate a student."

If Shalala's self-assurance has caused trouble, it has also fueled her success.

Within months of her arrival, she introduced the Madison Plan, a controversial affirmative action effort to increase the number of minority faculty and students. While she fell far short of her goals in attracting minority students, Shalala succeeded on most other aspects, including opening a multicultural center and instituting an ethnic studies requirement.

"That was a totally gutsy thing to do for a new chancellor of any gender, especially for a woman of a major public institution," said Prof. Susan Friedman.

In part, Shalala is driven by her love of a contest, Friedman said. When Friedman despaired over conservative criticism, Shalala practically rubbed her hands in anticipation, saying, "This is going to be exciting."

As the first woman named to head a Big 10 university, Shalala was keenly aware of the symbolic importance that would attach to her treatment of the athletic program. Robert F. Wagner Jr., former deputy mayor of New York and a longtime friend, remembers her walking into a Japanese restaurant carrying "this enormous wad of magazines" on college sports. "She was in no way an expert on college football," said Wagner, but she "mastered it in no time."

Two years into her tenure, Shalala fired the athletic director and the football coach, replacing them with a popular alum and a Notre Dame coach. Many say the athletic program is stronger now than it has been for years.

"This five-foot woman, to watch her deal with football ... she has a good sense of the jugular," said Marian Wright Edelman, a friend of Shalala's and president of the Children's Defense Fund, whose board Shalala chaired.

Finally, Shalala was extraordinarily good at fund-raising, bringing in $400 million from private donors.

"The consensus was that she was a great chancellor. But there was a division of opinion," said Prof. Ed Cortez. "The old guard said, 'Who is this little lady coming from New York wheeling and dealing and moving too fast.' "

Many on the faculty didn't know what to make of Shalala, who insisted on being called "Donna," drove herself around in a Jeep Cherokee and roamed the dorms to introduce herself to the freshmen.

The university news office had to staff her in shifts. She would be up before dawn walking her golden retriever, Bucky, then at her desk before much of the campus was awake. She traveled frequently, maintained several board memberships and attended campus athletic events regularly. On many evenings, she held receptions at her 30-room chancellor's mansion.

With few exceptions, her life was the school. Never married, she maintains a wide circle of close friends, among them a group that includes former New York City Council president Carol Bellamy and Texas columnist Molly Ivins who have established a tradition of taking exotic vacations together, including hiking in the Himalayas and rafting on the Salmon River.

Shalala summarizes her years at Madison with no attempt at modesty: "I pushed them beyond where they thought they could go," she said. "That place is better than it thought it could be."

Shalala's mother, Edna Shalala, said that as a child, Donna always fought to be first. Her twin sister, Diane Fritel, said Donna "was always the leader."

Shalala and her sister were raised in a big white frame house with dark green trim on the west side of Cleveland. Their grandparents on both sides had immigrated from Lebanon, and the family remained closely tied to the Lebanese community. Their father, the late James A. Shalala, ran several small grocery stores until he went bankrupt, then sold real estate. Their mother was a physical education teacher who attended night law school when her twin daughters were in elementary school. She is still, at 81, a practicing lawyer.

The twins were notorious tomboys, playing baseball with the neighborhood boys and softball on a girls' team -- the West Boulevard Annie Oakleys -- coached by George Steinbrenner, now owner of the New York Yankees. Once they tied up a neighborhood boy and threw him in a pit.

"We never wore dresses if we didn't have to," said Fritel, who lives on a farm in North Dakota with her husband and four children. The girls played tennis competitively, and "Donna always won," her sister said. Their mother still holds a national title for her age group.

In high school, Shalala served as editor of the student newspaper, the West Tech Tattler, where she is remembered as "a real taskmaster" by Paula Slimak, who worked for her. "She was so driven, you did not want to cross her." But Slimak, who has kept in contact with her over the years, also says Shalala was her idol.

Things weren't always easy. Shalala's father lost his business the year she graduated from high school, leaving no money to pay for college expenses. Fritel said relatives helped her sister buy clothes, and Shalala scrambled around and won several scholarships.

When she returned home for her first visit from college -- she attended Western College for Women, in southern Ohio -- she had "this funny accent," her sister said, which she had apparently picked up from East Coast classmates. "We thought they had an uppity accent. My father said, 'You're home now, you can leave the accent behind.' "

Shalala attended graduate school at Syracuse University during an intense period on college campuses. Prof. Alan "Scotty" Campbell, for whom she worked, recalled when students occupied a building to protest the Vietnam War. "Donna and I both stayed up all night," he said. "Donna tried to talk the students out, which she successfully did. ... She had their confidence."

If the students arrived with liberal views, Syracuse emboldened them, reinforcing their sense of social justice and their belief in government. Shalala "was not that radical, but she was certainly to the left of center. We all were," said Peg Goertz, now a visiting professor at Rutgers University. "I think everybody still believed that we could make a difference. ... We were going to try to make the world better."

After earning her doctorate, Shalala taught at City University of New York and Columbia University's Teachers College. She worked at HUD until the end of the Carter administration then returned to New York as president of Hunter College.

As Shalala was learning the real-world lessons of politics and management, her ideas about social policy were changing. She said she began to believe that government programs should involve more give and take, that beneficiaries should be forced to take more responsibility for their own lives. She voices support for Clinton's promise to "end welfare as we know it" by forcing recipients to find work after two years of benefits.

"Just because you're a teenager and you have a baby, you shouldn't expect to be on the public dole the rest of your life," she said. "People ought to be taught as they grow up that they will go to work and work most of their lives."

(At the same time, it is clear from initiatives already announced -- federal purchase of vaccines for all children, expanded funding to make Head Start a full-day, year-round program for more children and major new federal regulation of the health industry -- that Shalala and the Clinton administration continue to see government as a powerful force in improving the welfare of society.)

Shalala spends a fair amount of energy convincing people that she is indeed a "new" Democrat in the Clinton mold.

"My ideas have evolved. I'm not afraid of growing up. I'm not insecure about that. I think that's okay," she said. And finally: "... Watch what we do, not what you think we were."

Like the kid taking her personal bow, Donna Shalala wants all of us to watch her. Much of what happens in government over the next four years, she argues, will happen at HHS, an agency that spends 40 percent of the federal budget. "That's why I wanted the job. ... The responsibilities are awesome. Awesome is the word. ... At best, I'll be a tugboat captain. It's an extraordinary opportunity in leadership. But frankly, it's very scary."

The crash of reality: Donna Shalala is scared? It is, for her, an extraordinary moment of modesty. But it passes in a breath, and then she is herself again, describing with utter surety how she will go about it, how she will execute her plan to make the world a better place.

Staff writer Dan Balz and special correspondent Margaret Mason contributed to this report.