SIOUX CITY, IOWA, JAN. 11 -- Four Democratic presidential candidates sparred tonight over trade policy, the budget deficit and Social Security, but their debate didn't come alive until one of them put a question to the candidate who wasn't there: Gary Hart.

Midway through a televised debate here, former Arizona governor Bruce Babbitt put the question to an absent Hart. Babbitt, trailing badly in the polls, prefaced the question by saying, "I know Gary Hart is not here. I'm not sure where he is. He said he was taking his case to the people. Well, it looks to me like the people are here . . . . The people are in Sioux City."

The question concerned Hart's support of an oil import tax, which Babbitt called "not only an old idea but a terrible idea." Because Hart wasn't present, Babbitt said Rep. Richard A. Gephardt (D-Mo.), who "is a surrogate for him" on the issue, should answer the question. Gephardt, somewhat baffled by the turn of events, defended the tax.

The two-hour debate, broadcast from Morningside College here, attracted the four Democratic hopefuls -- Babbitt, Gephardt, Massachusetts Gov. Michael S. Dukakis and Sen. Paul Simon (D-Ill.) -- who are the most frustrated by Hart's recent reentry into the presidential contest.

Tonight's event was considered a preview to a larger debate Friday in Des Moines in which all seven Democratic candidates, including Hart, have agreed to participate. Babbitt's question opened up a sharp round of exchanges among the candidates.

Babbitt and Simon had the sharpest exchange of the evening over Simon's plan to balance the budget within three years.

"You're telling me you're going to get the deficit down by reducing interest rates, and you're telling me you're going to reduce interest rates by getting the deficit down," Babbitt said. "That's a puppy chasing its tail."

Simon did not directly respond -- in part because Babbitt took so long to ask the question that Simon did not have time.

But the two returned to the subject a few minutes later, with Babbitt telling Simon that he was "not being honest" by suggesting that the budget could be balanced without taxes, and that if taxes were necessary as a last resort, they should be levied only on the wealthiest one percent of taxpayers. "Your tax philosophy is, 'Not you, not me, tax the fellow behind the tree.' " At another point, Babbitt accused Simon of a "moral deficit."

"You are distorting my position," said Simon, who chided Babbitt for proposing a sales tax that Simon said would fall on middle-income and poor taxpayers. "I have said, if necessary, let's tax the people" who have received the greatest tax reductions during the Reagan era.

On Social Security, Gephardt asked whether Babbitt's plan to cut Social Security benefits for the wealthy would not break a "basic tenet" of the system: that it is a contributory social insurance system rather than a welfare plan.

Babbitt responded that his proposal was not to cut benefits but to fully tax them among wealthy recipients. He said to do so would not break faith with the vision of those who created the system. He also said that the "congressional mentality" that treats the "Mellons and Vanderbilts the same as a widow living in a cold-water flat" was "mush."

Simon and Dukakis entered into a more mannerly tiff over the most effective way to provide jobs for the economically disadvantaged. The Massachusetts governor challenged Simon to endorse the approach he has used in his state, which involved providing job training, day care and health benefits to welfare recipients. He said such an approach would be more effective than the $5 billion jobs program that Simon has supported.

Simon said his program also includes a job training component.

Gephardt asked his rivals to join him in supporting his legislation that threatens retaliation against trade partners that do not open their markets to imports. He also asked for support of legislation that would allow local farmers to vote on whether there should be federal crop controls in their areas.