September 30, 1990

LEAD: Only a short distance from the polished glass towers of the United Nations, where 71 world leaders have converged this weekend for the first global summit on children, the very symptoms and conditions the leaders would eliminate still fester, in places like central Harlem, where the infant mortality rate is the same as Malaysia's.

LEAD: Special Today: Op-Ed at 20/Section 4A

LEAD: Imagine Edouard Manet, that founding figure of modernism, accompanied perhaps by Antonin Artaud, the creator of the post-Surrealist Theater of Cruelty, magically together in the United States and wandering through what is sometimes called the cultural ''cutting edge,'' the present-day avant-garde.

LEAD: SOME of the girls hurrying to their next class at West Rocks Middle School, in Norwalk, clutch bright lunch boxes festooned with the latest popular cartoon characters; others, wearing makeup, look mature enough to be attending high school.

WASHINGTON - As the Federal budget deficit threatens to choke the economy, the most powerful men in Government, meeting week after week, hour after hour, have found it far easier to bash each other for inaction than to find common ground. Faced with a widespread shutdown of Government offices and activities in the absence of a budget agreement, Congress has scheduled sessions for today to revise the deadlines of the Federal budget-balancing law to avoid automatic multi-billion dollar program cuts on Monday. After a compromise between White House and Congressional negotiators late Friday night, it appeared the way was open for a deal that would keep the Government functioning. But in an atmosphere of growing disgust at debacles such as the savings and loan collapse and the ethical missteps on Capitol Hill, the budget quagmire is for many Americans the most telling evidence yet that the nation's leaders are sacrificing the public interest for their own. "The mood is almost 100 percent 'the hell with them all,' " said Larry King, the national radio and television call-in host. "I don't remember any time quite like this. Out of 300 calls in the last two weeks, 130 have been on Congress and the deficit. I haven't gotten one call that George Bush is correct and Congress is wrong, or that Congress is correct and George Bush is wrong. There's a 'damn both thy houses' attitude." Some politicians are equally harsh, among them Representative Lee Hamilton of Indiana. "The most serious consequence of the budget deficit may be that we've lost our credibility," said Mr. Hamilton, one of the most respected House Democrats. "No party, no leader, no member is going to come out of this looking very good. We're letting the country down." Much of the country would seem to agree. A recent New York Times/CBS News poll showed that 59 percent of those surveyed said they did not believe that President Bush and Congressional leaders were making a serious effort to reduce the deficit. Only about half that number said Mr. Bush and Congress were really making a serious effort. In follow-up interviews last week, poll respondents said they were fed up like never before. "They're just fighting each other on the news," said Merry Snyder, a 57-year-old care worker for the developmentally disabled in Arlington, Washington. "They're not putting the American people first. They're putting themselves first. They're not thinking about us at all." Wanda Johnston, an 84-year-old retired real estate broker in Phoenix, said that Congress and the White House don't seem "even interested in trying" to remedy the deficit. "They are simply sitting there like two dogs fighting over a bone." That's the way it seemed last week. Mr. Bush started the latest round of recriminations as he traveled to high-roller Republican fund-raising gatherings in the Middle West warning that if automatic spending cuts take effect Monday, "the Democratic Congress knows that it will be held accountable." The Democratic Congress was furious. Brandishing a milk carton on the House floor, Representative Bob Wise, a West Virginia Democrat, mocked the President for staying out of Washington at a crucial time in the talks. He said: "There is a face that is soon going to be appearing on the grocery shelves if he does not get back to Washington pretty soon. Come home, President Bush. Call a toll-free number. We will pick you up. Get to the summit where you belong!" It was not supposed to happen this way. To harness the massive Reagan-era deficits, Congress in 1985 passed the Gramm-Rudman-Hollings law, which called for steady reductions in red ink. Each year since then, Congress and the White House negotiated, only to wind up with a compromise that put off tough decisions for yet another year through budgetary tricks like revising the deficit reduction targets. This year, with the economy appearing on the brink of recession, the stakes were even higher. But both sides remained adamant in their opposition over one issue in particular, Mr. Bush's proposal to lower the capital gains tax. It was an issue more of symbol than substance - many economists say it would have only a minor impact on the deficit -but it was anathema to Democrats, who note that it benefits mainly the wealthy, and unwaveringly demanded by Mr. Bush, perhaps to ease the pain of his broken pledge of no new taxes. In a compromise late Friday night, the Democrats yielded on capital gains and the White House agreed to a higher income tax for wealthy Americans. No matter what the final package is, the deficit is not about to disappear. There are no quick fixes in the world of budget making. Senator Warren B. Rudman, a New Hampshire Republican and an author of the deficit-reduction law, suggests that the American system of Government is the core problem. "I really wonder whether we have reached a stage in our history where the three branches of Government are really working any more," he said. "It's getting to be a formula for gridlock with no accountability, with the American people not knowing whether to blame the President, the Republicans, the Democrats or just everybody." Of course, if the backroom budget talks result in a breakthrough, it probably won't take long for the warring factions to close ranks: Mr. Bush and Congressional leaders will no doubt gather under bright television lights at the White House to congratulate each other, proclaiming that they have saved the country from what some commentators call "Beltway Armageddon." For a while, at least, praise will substitute for the back-biting. But it is unlikely to be genuine. As Representative Jim Lightfoot, an Iowa Republican, put it in a tongue-lashing he delivered from the House floor last week: "I would suggest to my colleagues that many Republicans and good conservative Democrats are sick and tired of being cast and forced into the role of playing the clown. It is time that this circus closed and left town." THE NATION