Joined by dozens of children at the White House, President Clinton signed legislation yesterday revamping the nation's adoption laws to make it easier to move tens of thousands more children out of foster homes and into permanent families each year.

The measure, a personal priority of first lady Hillary Rodham Clinton, redefines national policy toward children separated from their parents so that the government's top priority from now on will be determining the best interests of the child rather than necessarily reuniting families.

"Fundamentally, it will improve the well-being of hundreds of thousands of our most vulnerable children," the president said during the East Room ceremony. "The new legislation makes it clear that children's health and safety are the paramount concerns of our public child welfare system."

The legislation, which had bipartisan sponsorship and passed Congress last week with near-unanimous support, rewrites the 1980 federal law that required states to pursue "reasonable efforts" to keep families together to obtain federal money for foster care. Instead, officials said, new time limits and federal funding incentives in the measure will result in speedier processing with the aim of meeting Clinton's goal of doubling the number of children adopted from foster homes each year to 54,000 by 2002.

The new law is the latest initiative embraced by the Clinton White House to encourage adoptions, after a previously enacted tax credit and new rules intended to break down legal barriers to cross-racial adoptions.

Separately yesterday, Clinton also signed legislation providing a 2.1 percent cost-of-living increase in benefits for 2.6 million disabled veterans and surviving family members, effective Dec. 1.

The adoption signing ceremony had the look of a school assembly. Joining the many politicians, parents and welfare officials were nearly 50 children from adoption agencies, foster care homes and the Badeau family of Philadelphia. Susan and David Badeau have 21 children, 19 of them adopted.

Hillary Clinton has made adoption a pet cause for many years and argued in her book, "It Takes a Village," that 100,000 children could be removed from the adoption and foster care rolls each year with the right policies. Adoption has long hovered around the Clintons' personal lives as well. Hillary Clinton had trouble conceiving their only daughter Chelsea and as recently as last year the first lady said they were thinking about adopting a second child.

However, after the election, the president privately told people in the White House that they had opted against such a move, at least while he was still in office, because any adopted child would need more time and attention than they would have available.

During yesterday's event, Hillary Clinton recalled meeting a young girl waiting for adoption two years ago. "I saw her last year at an event in Kansas City and almost didn't recognize her -- from a shy, withdrawn 13-year-old, she had blossomed into a cheerful, outgoing, confident teenager with a brilliant smile," the first lady said.

About 500,000 children now live in foster care, according to officials, and some wait two or three years for placement in permanent homes. Under the new rules, states must hold hearings on a child's future within 12 months of being removed from the family, instead of 18 months as previously stipulated. Officials no longer must make "reasonable efforts" to return children to parents if they have been abandoned, tortured or chronically abused.

States that increase the number of children adopted will receive a $4,000 bonus for every extra child placed in a permanent home and $6,000 for children who are older or have physical or emotional disabilities. The new law also ensures that children with special health needs keep their medical coverage when they are adopted.

"For too long, the cries and pleas of children in this system went unheard," said Sen. John H. Chafee (R-R.I.), who sponsored the legislation along with Sen. John D. "Jay" Rockefeller IV (D-W.Va.) and others. "Today we sent them a message of hope and an indication that they and their needs will no longer be cast aside, ignored or made a second priority." CAPTION: (Photo ran on page A01) President and Friend: President Clinton signed a law to speed adoptions. With him at White House was Aaron Badeau, 7, of Philadelphia, youngest of David and Susan Badeau's 21 children, 19 of whom they adopted.