The former first lady and U.S. Sen. Hillary Clinton stepped into her role as secretary of state Thursday after being confirmed 94-2 by the Senate.

Secretary of State Clinton started her day by introducing herself to State Department diplomats and employees, who crammed into the lobby to meet their new boss.

"We must be smart about how we execute our power," Clinton said. ?And we have smart people in abundance."

In the afternoon, Clinton was joined by President Barack Obama and Vice President Joseph Biden to announce the appointment of two top U.S. diplomats.

Former Senate Majority Leader George Mitchell, credited with helping to broker peace in Northern Ireland, has been named special envoy for the Middle East, while former United Nations Ambassador Richard Holbrook has been assigned to Pakistan and Afghanistan.

In the meantime, Caroline Kennedy has withdrawn her name from contention for Clinton?s New York Senate seat after sending mixed signals to the media the day before.

Sources close to Kennedy say she opted out of contention for personal reasons, unrelated to the failing health of her uncle, Sen. Ted Kennedy (D- Mass.), as it had been previously reported.

Gov. David Paterson is expected to announce his pick of junior senator decision by Friday.