At first, I thought that the deficit-reduction package would be better than nothing at all, and that Congress should hold its collective nose and vote for it: without some action, there would be a mindless across-the-board sequester bringing many elements of essential government to a screeching, irrational halt.

But after reflection, my conclusion is that the price is too high: the budget "summiteers" at the last minute sneaked into the deal a slew of new tax shelters that would cost $12 billion over five years.

It breaks faith with taxpayers who bought the 1986 Tax Reform Act, which cut the top tax rate for the wealthy to 28 percent, on the basis that tax loopholes and shelters were to be eliminated. Now, the wealthy would get the low tax rate and tax shelters.

The $12 billion cost is merely the official estimate: once tax lawyers and accountants go to work on such goodies as a 25 percent deduction of the cost of stock in one of the qualified small companies, that figure is likely to soar.

The Bush team appears to have put one over on the Democrats, selling the new tax-shelter provisions at the eleventh hour, ostensibly to provide "new incentives to stimulate economic growth." Billed as a consolation prize for Bush, who gave up his vaunted capital-gains tax-cut proposal, the new plan in some ways is worse than preferential rates for capital gains.

A capital gains tax cut would primarily benefit the rich but also provide some benefits to lower-income persons. The new tax shelter for stock purchases benefits only the rich, who can put up big chunks of money to reap an immediate tax credit.

It is nonsense to suggest, as did The New York Times, that "this year's ugly compromise is acceptable only if Congress rights the wrongs next year." The time to repair the damage of the tax-shelter gimmick is now, before it gets written into law.

Even then, the budget compromise won't be a thing of beauty. It won't help bring the economy out of recession. In fact, the small contraction in the deficit may make it worse, unless there is prompt offsetting action to lower interest rates. Such relief is desperately needed to prevent a collapse of American businesses and banks, which are in deeper trouble than anyone wants to admit.

The proposed $40 billion reduction in the deficit for this fiscal year (not the highly ballyhooed $50 billion) doesn't even keep pace with the increase in the deficit as projected as recently as July. Then, the Bush administration estimated the red ink for fiscal 1991 at $231.4 billion. The new estimate has swelled -- because of the dip in the economy, a worsening S&L crisis and the cost so far of the military buildup in Saudi Arabia -- by $62.3 billion to $293.7 billion.

So the agreed-upon deal, even if the economy doesn't plunge into recession, only nibbles at the accumulated red ink. And whether it works to stimulate growth in the long run depends on the dubious proposition that future Congresses will keep a commitment that this Congress makes to cut spending and raise taxes.

Moreover, the package is regressive because it extracts most of the deficit reductions from lower- and middle-income groups that can least afford it. Excise taxes on beer, wine, liquor and cigarettes obviously take a bigger chunk of income from less-well-off taxpayers than from the rich.

Increased Medicare premiums also place a relatively greater burden on poor taxpayers than on the rich. A better alternative would have been to tax more of the Social Security benefits received by wealthier taxpayers.

Against regressive tax and spending measures, the only progressive element offered is a limitation on itemized tax deductions for taxpayers with incomes over $100,000 a year. That's equivalent to an extra marginal tax rate of 1 percent for richer taxpayers. In addition, there is a 10 percent luxury tax on expensive cars, yachts, jewelry and furs.

Balancing it all out, the Democrats, who promised to shift the burden more to upper-income brackets, failed in their objective. As Tennessee Sen. James Sasser, chairman of the Senate Budget Committee, ruefully conceded, the package "has not corrected the regressivity, which has stormed through the tax structure over the last 12 years."

In particular, the package deal raises the question, once again, of whether the Democratic Party is a mere appendage of the Republican Party rather than a true opposition party, as banker Felix Rohatyn suggested earlier this year. Sen. George Mitchell, Speaker Tom Foley and Majority Leader Richard Gephardt have gone along with a compromise that puts the monkey on the back of the lower and middle class. It gets harder to see real differences between them and moderate Republicans such as George Bush, Bob Dole and Minority Leader Robert Michel.