Following are excerpts of President Clinton's news conference yesterday:

While America is enjoying success abroad, it is important that we keep pushing forward on our challenges here at home. This is a time of great hope for our nation. Yesterday, we learned that the American economy grew at 4.3 percent in the first three months of this year. America plainly is on the right track.

But we will be judged by what we do with this opportunity -- whether we seize it or squander it in petty bickering and partisan animosity.

There will be plenty of time for politics in the months to come. The summer should be a season of progress. We should start by acting quickly on issues where most lawmakers -- Democratic and Republican -- agree: legislation to let disabled Americans keep their Medicaid health insurance when they go to work; an increase in the minimum wage; campaign finance reform; a strong and enforceable Patients' Bill of Rights.

I was heartened that earlier today, the House overwhelmingly passed legislation making sure that foster children are not cast out in the cold when their time in foster care ends. . . .

We must turn to . . . difficult challenges facing our nation. First, we have a duty to maintain the fiscal discipline that has produced our prosperity, and use it to strengthen Social Security and Medicare for the 21st century and to pay down our national debt.

On Tuesday I will propose the detailed plan to modernize Medicare, cutting cost, improving service and helping senior citizens with their greatest growing need: affordable prescription drugs.

Second, we must widen the circle of opportunity by investing in education while demanding accountability and insisting that the Congress keep our commitment of last year to finish hiring 100,000 more teachers to lower class size in the early grades.

Third, in two weeks I will be joined by corporate, civic and political leaders of both parties on a four-day tour of America's new markets -- the places in our country which have not yet felt the surge of our prosperity -- to mobilize the private sector to bring jobs and growth to our poorest neighborhoods and to build support for our New Market Initiative, to give tax credits and loan guarantees to those who invest in America on the same terms we give to those who invest in developing the economies overseas.

And fourth, in the wake of the tragedy at Littleton, we must continue to meet the challenge of youth violence. Hillary and I are developing a national campaign on youth violence, working with parents, educators, the entertainment industry and others.

But we also must make sensible steps . . . to take guns out of the hands of criminals and away from children. We can't expect young people to stand up to violence if Congress won't stand up to the gun lobby. . . . There is still time for Congress to act. The Republican leaders could appoint legislators as negotiators to craft a bill that includes the tough Senate provisions. I hope they will do that and send me a strong bill. Plainly, the country wants that. . . .

Violence in Kosovo

Despite the end of the war there is still a new wave of violence and terror in Kosovo. . . . Are you alarmed by what's going on there? And why is NATO letting this happen? Can't NATO do more to stop it?

. . . NATO is not letting it happen. We're doing what we can to stop it, and I am concerned about it. I'm not particularly surprised after what they've been through. . . . If we could get all of our people in completely and then get them properly dispersed around the country, we'll be able to provide a far higher level of protection. . . .

China and Spying

In the wake of California [Rep.] Christopher Cox's study of spying in the U.S., and specifically Chinese attempts to spy, you asked your Foreign Intelligence Advisory Board to look into this, and it came back with a central recommendation to separate the nation's nuclear labs from the Energy Department. Your energy secretary seems to be resisting that. Tell me, sir, how you feel about it. And . . . do you still maintain that you were not told anything about these Chinese efforts to spy at the nation's nuclear labs during your administration?

. . . There were actually two separate organizational recommendations that they made: . . . either that the labs could be put under an independent board or that the labs should be taken out of the present hierarchy of organization because of the culture . . . of the labs and its resistance to oversight. . . .

There has been a 20-year problem with lax security at the labs. And what I said was that I didn't suspect that any actual breaches of security had occurred during my tenure. Since then, we have learned of the off-loading of the computer by Mr. [Wen Ho] Lee from the secured computers into his personal computers. That's something we know now that I didn't know then. . . .

What I should have said was I did not know of any specific instance of espionage, because I think that we've been suspicious all along. . . .

Medicare Prescriptions

I'd like to ask you about Medicare and your plans that you're going to be announcing next week. This is a program that tens of millions of Americans depend on, and yet in 15 years it will be effectively bankrupt. And you're about to propose what could be a very costly additional benefit in the prescription benefit. . . . Isn't that going to make the problem worse, not better?

No. . . . I think it's important that we propose a prescription drug benefit because life expectancy is going up, drugs are being constantly developed which help to improve the quality as well as the length of life, and if they are properly taken, they can actually reduce long-term hospitalization and other medical costs.

Now it is absolutely true that if we design this wrong, it could wind up being a lot more expensive than a rosy scenario suggests. . . . [But] you've got 15 million Americans, seniors out there, without any kind of coverage for their medicine. . . .

Campaign Finance Vote

What is your strategy for a comprehensive campaign finance reform -- to really make it pass?

. . . What I think we have to do is to keep it on the front burner enough so that the discomfort level rises high enough that an actual vote is allowed. . . .

Timing and Politics

Can I ask a political question? When Vice President Gore announced officially for president he chose a date when you were going to be out of the country. And according to Mrs. Clinton's supporters, if she announces her exploratory committee in the next couple of weeks it would be at a time when you've got a commitment to go out to South Dakota. Do you think your personal behavior has made you something of a liability to those who are running? . . .

. . . As far as his doing it when I was out of the country, I thought that was a good thing. Very often, you'd be amazed how many times over the last six and a half years we have planned for certain announcements to be made by the vice president when I was out of the country because that way it gets -- I mean, far be it from us to try to maneuver the press -- but he gets . . . better coverage. . . .

Generating Antagonism

You called for greater cooperation in Washington. But it seems apparent, for many people, you personally remain a polarizing and divisive figure in national politics. I was wondering if you have ever reflected on why . . . you've always seemed to generate such antagonism from your opponents. And do you assign any responsibility to yourself for what this morning you described as the rancorous mood in Washington today?

. . . I think generally in our country's history, the people who are progressive, people who try to change things, people who keep pushing the envelope, have generally elicited very strong, sometimes personally hostile, negative reaction. . . .

People in positions of responsibility owe the public -- owe the public -- their best efforts every day. And they have no right to let their personal feelings get in the way. I try not to do it, and I would hope others would do the same.

No Kosovo Bounce

Normally when the United States wins a war, that victory is accompanied by a surge of approval for the commander in chief. The war in Kosovo has not produced that sort of bounce for you. As a student of the polls, what do you think they're trying to tell you here?

First of all, I don't know that we know that yet. . . . I did what I thought was right for the United States and for the children of the United States and for the future of the world. . . . I think anything I can do to reduce terrorism, to reduce the ability of terrorists to have weapons of mass destruction, or to stand against racial and ethnic genocide and cleansing is a good thing for our future. . . . People can react however they like. . . .

Congressional Democrats

You talked about the need for bipartisanship, but don't you have a problem with congressional Democrats? They say: Bill Clinton doesn't have to face another election, we do. And they want to run against a do-nothing Congress. As an experienced political pro, don't you have some sympathy for them?

I do, except -- I have a lot of sympathy for them. But, first of all, not all Democrats believe that. . . . You're better off doing what you can -- what you believe in -- so you can go tell the people you did that. . . .

Polls on Domestic Issues

Your [polling] numbers have been tracked on certain [domestic] issues showing that core groups, people who have supported you in the past, have now fallen off. Do you fear, sir, that perhaps you are beginning a disconnect with the American people? . . .

Well, for one thing, the only polls I've seen show overwhelming public support for the Patients' Bill of Rights, for closing the gun show loophole, for the other common-sense gun initiatives, . . . for campaign finance reform. . . .

I recognize that the public was ambivalent about Kosovo, but they were ambivalent about Bosnia and Haiti and a lot of the other things that I've done in foreign policy, helping Mexico when they were in trouble. But I think the president hires on to make the tough decisions and the controversial decisions, too. . . .

The polls are also showing . . . a deep concern for the nation's moral fabric. . . . What responsibility do you personally take for that? . . .

Well, I think people are worried about . . . the shattering effect that Littleton had.

In terms of what happened to me in the impeachment issue, I did what I could by telling the American people what I was going to do, that I was going to go back to work, being the best president I could be, and I was going to go back to work to repair my family life. I worked very hard for a year to do that, and the public, at the time, had a strong response to that. That's all I can do and that's what I have done. . . .

And I believe, therefore, that there is, in that sense, a moral component to the debate we're having over guns. . . . We know from the experience of the Brady bill that if we do background checks, thousands of people . . . who shouldn't buy guns won't get them. . . . The people on the other side essentially say: Yes, but we don't want to be inconvenienced. And when people see inconvenience elevated over the life of a child in this context, I think that causes some problems. . . .

Surprises in War

Wartime presidents, even the great ones -- Lincoln, Wilson or Roosevelt -- all discover that wars never went exactly the way they planned it. In Kosovo, what surprised you or went a way that you didn't expect? And what lessons did you learn in Kosovo?

. . . I had two models in my mind on what would happen with the bombing campaign. I thought it would either be over within a couple of days, because Mr. Milosevic would see we were united, or if he decided to sustain the damage to his country, that it would take quite a long while for the damage to actually reach the point where it was unsustainable. It took only a little longer than I thought it would, once we got into the second model.

I was surprised that we lost only two planes and no pilots. . . . I was a little surprised that we had no more problems than we did in maintaining our allied unity, given the enormous pressures that were on some of our allies. And I think that gives you some indication about the depth of conviction people had that this was right. . . .

I was surprised and heartbroken that the Chinese embassy was hit because of the mapping accidents. That did surprise me. I had no earthly idea that our system would permit that kind of mistake. That was the biggest surprise of all. . . .