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HOUSE DEMOCRATIC LEADERS REJECT BUSH'S DEFICIT-REDUCTION PROPOSAL

House Speaker Thomas Foley, D-Wash., and House Democratic leader Richard Gephardt of Missouri both rejected as inadequate Thursday the Bush administration's new deficit reduction plan offered to budget negotiators. "I would not judge it to be an adequate proposal," Foley told reporters, echoing the reaction of other Democratic negotiators, one of whom bluntly said Bush's plan "stinks." Foley said he was disappointed it isn't more extensive. But Foley said despite the weaknesses of the plan, offered at the bipartisan budget talks on Wednesday by Bush's budget director, Richard Darman, "it's the beginning of a process of greater specificity" from the administration. Gephardt, chairman of the budget summit, said Bush's plan "is not a good start."

"It has some obvious initial deficiencies," Gephardt said. "I'm worried that it's far short of where it needs to be."Democrats Thursday were considering the new Bush proposal and planned to offer their own proposal during a budget summit meeting later in the day.

The Bush plan - the first deficit reduction plan to be offered after five weeks of preliminary talks - called for $51 billion in budget savings in fiscal year 1991, which begins Oct. 1, and about $440 billion in savings over five years, participants said after Wednesday's closed meeting. Democrats have pushed for larger reductions, particularly over five years.

Bush's plan achieves those savings mostly through additional cuts in domestic programs and entitlements, such as Medicare and farm programs, according to participants. Sources said the plan would cut defense by about $6 billion - nearly double the $3.2 billion cut Bush proposed in January but far short of the Pentagon cuts proposed by Democrats.

The plan contains no significant new revenues beyond the roughly $20 billion in taxes and user fees Bush proposed in January, participants said.