Sen. Richard Lugar's new speech on NATO arrived with a cover letter from his press secretary bravely saying: "This is NOT just another dull speech meant only for policy wonks." And you know, it's so. The Indiana Republican, a former Foreign Relations Committee chairman, has taken a subject -- the calamitous European and American failure in Yugoslavia -- that has left most people depressed, sullen and mute, and come up with a proposal to force a policy debate.

He wants NATO, which is the structure that counts, to end its ban on operations "out of area" -- outside the territory of its members; to extend its membership into Europe's South (the Balkans) and East (the former Soviet bloc) in good time, and to take on the job of seeing to the strategic stability and democratic development of this extended region. He poses all this as a worthy and essential task for American leadership.

With NATO having achieved its founding purpose of containing Soviet power, it's "NATO: Out of Area or Out of Business," Lugar says in a snappy summary title.

This idea has been stirring. James Chace, for one, recently called on NATO to pick up "the security problems arising from the disintegration of the Soviet bloc -- to prevent borders that had been largely established after both world wars from being changed by force, to contain ethnic conflict and to aid in the transition to democratic institutions by monitoring elections and verifying arms-control agreements."

But within the Clinton administration and in the NATO hierarchy, it seems that the shock and shame of NATO's Yugoslav passage are still being absorbed. Routine prevails: Perhaps a third or more of the Pentagon budget is spent on an alliance that has lost its old mission of defense against external threat and has been unable to generate a convincing new mission.

Any real debate, of course, must address more than the options of drifting with the status quo and energizing the alliance to serve post-Cold War conditions. The world's turn has brought to the fore another alternative: a calculated retreat from engagement in local ethnic disputes and regional security equations, in Europe as elsewhere, and a new focus on economic considerations. The argument is that it is not only possible but economically and strategically prudent to trim commitments to changed times, shrinking resources and popular tastes.

Ignore the occasional denials: This strand of thinking plainly vies for favor in the president's mind and across his administration with a strand of appreciation and comfort with traditional ways. Politically and perhaps also temperamentally, Clinton seems to be pulled in different directions. He wants to be one of the old boys and one of the new boys at the same time. The challenge of Yugoslavia might have forced him to decide, but instead it left him to straddle. He never joined his secretary of state in dismissing Bosnia as "a humanitarian crisis a long ways from home, in the middle of another continent," but he never acted resolutely on an opposite premise either.

Lugar -- this is his strength -- explicitly embraces that opposite premise. Where Clinton has said Bosnia matters but not all that much, Lugar says Bosnia matters a great deal. Why? The problem is not just the unraveling of Yugoslavia or a potential ethnic crisis in Eastern Europe or an explosion between Russia and Ukraine, serious as those developments might be. Lugar sees danger in the spread of a "destructive xenophobic nationalism" across the whole of Europe. It is to head off the resultant sure and heavy damage to American political balance and American domestic reconstruction that he urges the United States to draw "a new trans-Atlantic strategic bargain."

A bit fevered, you say? Exaggerating the risk? Lugar notes some "limited" parallels with the period between the two world wars: a West exhausted by (cold) war, uncritical reliance on League of Nations/United Nations, disappointments in democracy and capitalism in the East, crimped political circumstances. "In short, history has not ended," he observes. "Democracy has not triumphed once and for all; its advances are under attack."

He notes some objections to his scheme -- that a Russia-first policy is more important than a NATO reorganization, that Eastern Europe is just too much trouble to bother, that the costs are unmanageable and that it's better to hold on to the old NATO, whatever its flaws -- and he responds. His answers aren't all equally conclusive, but he has certainly teed up an issue that will not go away.