As President Bush and congressional Democrats struggle to strike a deal to reduce the federal budget deficit, the American public has turned sharply pessimistic about the future of the economy, according to a new Washington Post-ABC News poll.

Six in 10 Americans now say they believe the economy is getting worse, a dramatic increase since January, while 51 percent of those surveyed said they disapprove of the way Bush is handling the economy. Six in 10 also said they believe the country has "gotten pretty seriously off on the wrong track."

The new poll, conducted July 19-23 among 1,509 people selected at random nationwide, not only points to the growing political risk to Bush over the economy, but also demonstrates the fallout for the president and the Republican Party since he abandoned his "read my lips, no new taxes" campaign pledge last month.

Bush's overall approval rating has dipped to 65 percent, still high by historical standards but the lowest level of his presidency. Asked whether they approved of Bush's reversal on the tax issue, 54 percent said no, 45 percent said yes.

The potential damage to the Republican party, whose candidates have used the tax issue effectively in campaigns, is striking. In May, by 53 percent to 35 percent, the public said Republicans were more likely to resist raising taxes than Democrats. But in the new poll, the Republican advantage on the key electoral issue had slipped to 44 percent to 37 percent.

Bush met again yesterday morning with congressional leaders at the White House to discuss the ongoing budget negotiations, and Republican and Democratic negotiators held separate sessions in the Capitol later in the day to hammer out the details of budget proposals.

Bargainers hope to be able to trade proposals this week. Late yesterday, GOP lawmakers endorsed a plan devised by budget director Richard G. Darman as an opening negotiating position. Democratic negotiators were unable to agree on a plan.

"We're going to submit a bona-fide proposal," said Sen. Pete V. Domenici (N.M.), the Senate Budget Committee's ranking GOP member.

The Republican proposal would cut the fiscal 1991 deficit by slightly more than the $50 billion target the negotiators had set and save about $500 billion over five years, according to GOP participants in the talks. Half the savings would come in spending cuts. The other half would come from new tax revenue and federal fees, and anticipated savings in interest payments resulting from the lowered deficit.

One of the most contentious parts of the plan is a cut of about $14 billion in such programs as Medicare and Medicaid, which pay benefits to everyone who meets certain conditions. The plan does not call for any change in Social Security. The target would be very difficult to meet, GOP congressional budget analysts said.

Advisers to Bush have privately expressed their concern that failure to reach a substantial budget agreement with the Democrats could threaten the economy and ultimately Bush's reelection prospects in 1992.

The new Post-ABC survey represents the gloomiest set of numbers of Bush's presidency, despite his continued high level of personal approval from the public.

Those high approval ratings grow largely out of the public's favorable view of Bush's handling of foreign policy. Seven in 10 approve of his overall handling of foreign policy, while 82 percent said they approve of his handling of the Soviet Union.

But the survey also shows that some of the intensity of public support for Bush has eroded. Since January, the percentage of Americans who said they strongly approve of Bush's overall handling of the presidency has declined from 33 percent to the current 21 percent. At the same time, the percent of people who said they disapprove of his job performance rose from 18 percent to 33 percent.

For most of his presidency, Bush has benefited from the approval of a majority of black Americans, a striking difference from the Reagan presidency. But in the new poll, nearly six in 10 blacks said they disapprove of Bush's performance, when only two months ago, a bare majority approved of how he was handling his job.

Public attitudes on the economy are consistently negative, according to the poll. Overall, only 9 percent said the economy is getting better, 58 percent said it is getting worse and 32 percent said it is staying the same.

When asked about their local economy, a question that generally produces a more positive view, 18 percent said it was getting better, 43 percent said it was getting worse and 38 percent said it was staying the same. When the question was last asked in January, less than a third of those surveyed said their local economy was getting worse, while nearly half said it was staying the same.

The most pessimistic attitudes were expressed by people living in the East, where many states are in or near recession. Seven out of 10 easterners said the economy is getting worse and nearly six out of 10 reported conditions locally were worsening. But a majority in each region said they believed the economy was going downhill.

For the second time in two months, 60 percent of the public said the country has gotten off on the wrong track, including half of all Republicans. The percentage of those who said the country is going in the right direction has declined steadily throughout the year, falling from 48 percent in January to 37 percent in the current poll.

The findings in the Post-ABC News poll are consistent with other recent polls suggesting that the public is increasingly worried about the future of the economy.

Staff writer John E. Yang contributed to this report.

Q. Do you think things in this country are generally going in the right direction, or do you feel things have gotten pretty seriously off on the wrong track?

.................. ......1990 ............. 1989.....

................July 24.....Jan 16....May 23...Jan 16

Right direction....37%.........48%......42%.......51%

Wrong track........60..........49.......55........ 46

Don't Know......... 3.......... 3....... 3......... 3

Q. Do you approve or disapprove of the way George Bush is handling his job as President?

.........................1990...............1989.....

................July 24.....Jan 16.....Aug 21..Feb 14

Approve............69%.........79%.......73%......76%

Disapprove.........33..........18........21....... 14

Don't Know......... 2.......... 3........ 6........10

Q. Do you approve or disapprove of the way Bush is handling foreign affairs?

.........................1990.................1989.....

................July 24.....Jan. 16.....Aug 21...Apr 21

Approve............70%.........75%........63%.......67%

Disapprove.........27..........21.........32........ 25

Don't Know......... 3......... 4.......... 5......... 8

Q. Do you approve or disapprove of the way Bush is handling the nation's economy?

.........................1990..................1989.....

................July 24.....Jan 16......Aug 21....Apr. 3

Approve............46%.........61%.........63%.......61%

Disapprove.........51..........34..........31......... 3

Don't Know......... 3.......... 5.......... 6......... 8

Q. Do you approve or disapprove of the way Bush is handling the federal budget deficit?

..............................1990......

.....................July 24......May 21

Approve..................30%.........34%

Disapprove...............67...........63

Don't Know............... 3........... 3

Q. Bush has dropped his "no new taxes" policy and says he will consider raising some taxes in order to reduce the federal budget deficit. Do you approve or disapprove of Bush having dropped his "no new taxes" policy?

..................1990

...............July 24

Approve............45%

Disapprove......... 54

Don't Know.......... 1

Q. Do you think the nation's economy is getting better, getting worse, or staying the same?

..........................1990................1989.......

.....................July 24...Jan 16....May 23....Jan.16

Getting better......... 9%.......11%........12%.......25%

Getting worse..........58........38.........37........36

Staying the same.......32........51.........50........38

Don't Know............. 1........ *......... 1........ 1

Q. How about the local economy where you live: is it getting better, getting worse, or staying the same?

...........................1990...............1989

......................July 24...Jan 16......Aug 21

Getting better...........18%.....19%...........27%

Getting worse............43......32............26

Staying the same.........38......48............46

Don't Know............... 1...... 1............ 1

Figures are based on a Washington Post-ABC News telephone poll of 1,509 adults nationwide conducted July 19-23. Margin of sampling error is plus or minus 3 for overall results. Sampling error is however, only one of many potential sources of error in this or any other public opinion poll. Interviewing for this survey was conducted by Chilton Research Services of Radnor, Pa.