SALINAS, CALIF. -- Leon E. Panetta, whose job as Budget Committee chairman makes him the House's leading disciple of fiscal responsibility, is preaching his gospel to a skeptical congregation.

"It is a serious crisis that we face" in the federal budget deficit, he told about 40 Salinas Kiwanis after lunch in the backroom of the Italian Villa restaurant here, where the special is corned beef and cabbage.

"We have to understand that all of us are going to have to make some sacrifices in order to ensure that our democracy remains strong," the seven-term Democrat declared. At stake, he added, is nothing less than "our leadership position in the world."

Last week, a continent away from budget talks between Bush administration officials and lawmakers, away from squabbles over budget baselines and how to account for the exploding costs of the savings and loan cleanup, Panetta was spreading his familiar message with characteristic intensity and earnestness.

It is a message that reflects the roots of this 51-year-old son of Italian immigrants who was raised in Monterey's "Spaghetti Hill" neighborhood. But it is also a message that some seem unwilling to heed in Panetta's varied district, which stretches 150 miles along the breathtaking Big Sur coast from the luxuriant Monterey Peninsula in the north and reaches inland to rich farmland tilled and harvested by migrant workers.

Audiences in Salinas, Monterey and Pismo Beach asked more questions about whether the Army would close Ft. Ord and whether oil-drilling rigs would be sharing the Monterey Bay with the seals and otters than about the deficit.

Many were skeptical about Panetta's path to redemption.

He says plainly that the solution to the deficit, projected to be more than $200 billion next year, must include both spending cuts and revenue increases. But some of Panetta's constituents told him the problem could be solved simply by cutting spending they do not like.

No sooner had Panetta finished speaking to the Kiwanis than Charles Perry, a ruddy-faced Salinas repair shop owner, was on his feet.

"I just can't go along with what you're saying," he said. "I cannot believe that Congress can send $700 million to Nicaragua and Panama and yet can't come up with money for the {Women, Infants and Children nutrition} program for pregnant women and children."

Others said they would be willing to pay more taxes -- if Congress used the money the way they want it to be spent.

"It should be used to diminish the national debt," said William Moreno, a Salinas municipal court judge. "It shouldn't be used to bring in new programs."

Patricia Miller, a librarian in San Luis Obispo at the opposite end of the district, reflected the opposite viewpoint. "I'm not going to be sastisfied to pay more taxes until things like education and medical care are addressed," she said.

The outcome of budget negotiations in Washington, which resume Wednesday, depends in large part on "whether or not there is a realization of the size of this crisis and whether or not the public is sufficiently aware of that to be willing to support the tough choices that need to be made," Panetta said. From the response he got last week, he knows he has his work cut out for him.

"We've gotten used to the deficit," offered Michael Guy, a Monterey attorney, who said he shares Panetta's concern. "How are we supposed to get excited about this issue when our leaders don't seem to be?"

"It's frustrating," Panetta said. "The message hasn't reached home yet . . . . It's very much a 'me' attitude -- you can find the solution somewhere else."

Panetta, who became Budget Committee chairman last year, is in the enviable position of not having to worry how his constituents will respond at the polls to his stern election-year call for "sacrifice spread throughout society."

He faces only nominal opposition in today's Democratic primary -- he has trouble recalling the name of his challenger, a follower of Lyndon H. LaRouche Jr. -- and from Republicans in the fall. Since being elected to the House in 1976, only once has Panetta been returned with less than 71 percent of the vote.

Indeed, he seems to have more trouble with his colleagues in Washington. As Budget Committee chairman, he pushes for spending cuts and revenues increases -- precisely the opposite of lawmakers' natural inclinations. House Ways and Means Chairman Dan Rostenkowski (D-Ill.) testily referred to him during a floor debate last year as "the House budgetary commissioner."

Panetta's message of fiscal responsibility has remained constant and was a focus of his efforts long before he took over chairmanship of the Budget Committee.

He entered politics as a liberal Republican, espousing a mix of social liberalism and fiscal conservatism that is a good match for his politically moderate district and recalls the late Earl Warren, the lawmaker's political hero whose autographed photograph is prominently displayed on the wall of his Capitol Hill office. Panetta switched parties in 1971.

Panetta comes by his fiscal caution honestly, having absorbed the lessons of thrift and industry from his late parents.

Carmelo and Carmelina Panetta came to the United States from Calabria, Italy, in the 1930s. After brief stops in Wyoming and Southern California, they settled in Monterey. The patriarch soon opened a restaurant about a block away from where his younger son now has his district office.

Carmelo cooked, Carmelina ran the cash register and young Leon, standing on a chair, washed dishes. The elder Panetta would close "Carmello's Cafe" at 2 a.m. and be back to open for breakfast, his son recalls.

"They had very little money, very little education when they came here," Panetta recounts. "They worked hard -- that was their nature. They understood sacrifice -- you had to put money aside so that your children would have a better life. They taught both of us what it meant to work, what it meant to commit yourself."

When Carmelo Panetta sold the restaurant and bought a 12-acre farm in Carmel Valley, that lesson took the form of having 8-year-old Leon work in the walnut orchard the elder Panetta planted. Later, the younger Panetta sold peaches by the side of the road, a job he says he hated.

"My father, in his lifetime, never had a single credit card," Panetta recalls. "He always paid in cash, whether he was buying a car or whether he was paying for my tuition at {the University of} Santa Clara -- the Jesuits loved him . . . . Anybody who does that these days, they're automatically accused of being a drug dealer."

Carmelo Panetta tried to raise his sons that way, too. He "kicked the hell" out of 18-year-old Leon when he discovered the teenager had secretly gotten a credit card to gas up his brown 1950 Chevy, Panetta recalled.

The lesson seems to have been well-taught. For years Carmelo Panetta's son has been advocating a "pay-as-you-go" approach to budgeting, where new programs could not be implemented without a way to fund them.

The chairmanship of the Budget Committee is a post that offers few tangible rewards -- no projects to bring home to the voters, few favors to be bestowed. But in the Monterey Peninsula, it generates a bittersweet hometown pride.

Last September, Panetta spoke at the Santa Rosalita Festival in Monterey after the blessing of the fishing fleet. He was introduced by Jerry Lucido, who has known Panetta since the lawmaker was a boy.

"We're just so proud that he's now chairman of the Budget Committee," Lucido said. "I only wish he was chairman when the country wasn't going broke."