The atmosphere was more summer camp than budget summit yesterday as deficit-reduction talks between Bush administration officials and congressional leaders resumed in the Andrews Air Force Base Officers' Club.

Many of the participants arrived by bus laden with bags and gear. The Democratic and Republican bargaining teams assembled in identical side-by-side bungalows. Senate Minority Leader Robert J. Dole (R-Kan.) even showed up with his pet schnauzer, Leader, and an oversized baseball bat labeled "The Big Budget Stick," which he gave to President Bush.

When the Democrats went from their cottage to the Officers' Club, they employed the buddy system, marching two-by-two with Senate chairmen paired with their House counterparts. They were neatly arrayed by rank, led by Senate Majority Leader George J. Mitchell (D-Maine) and House Speaker Thomas S. Foley (D-Wash.).

There were even name tags of a sort hanging from participants' necks: orange laminated credentials declaring "1990 Budget Summit."

"It's a giant 'color war,' " joked a congressional aide. "We're the 'Raccoons' and they're the 'Badgers.' "

After 84 days of futile talks in a somber, dark-paneled room in the Capitol -- where lawmakers have tended the federal fisc since the days of Henry Clay, the "Great Compromiser" -- the sessions were moved to a converted bar on the air base. The hope was that the self-imposed isolation would sharpen the participants' focus on trying to devise a five-year, $500-billion deficit-reduction package that would save $50 billion in the first year.

"I thought it was helpful to get people away from telephones and other obligations," said House Majority Leader Richard A. Gephardt (D-Mo.), who presides over the talks.

Others are not so sure. "If it accomplishes the goal, fine," said Rep. Silvio O. Conte (Mass.), the ranking Republican on the House Appropriations Committee. "If it doesn't, it's a waste of time."

The first order of business yesterday was a pep talk from the counselor-in-chief. "There's a new spirit of optimism that we can get an agreement," Bush told reporters on his way into the session. "It's going to take compromise . . . . Big differences remain."

After reconfiguring the tables in the room in an effort to overcome poor acoustics, the two sides traded opening positions yesterday afternoon, sources said.

The administration's first offer would have cut $52.5 billion from the fiscal 1991 deficit and save $513.2 billion over five years, the sources said. It set military spending at roughly the same level as Bush's January budget request, including the costs of operations in the Middle East.

It sought $15.6 billion in savings from programs called entitlements that benefit all those who meet certain qualifications. Medicare would be cut by $7.2 billion and benefits for federal retirees would be frozen for one year, saving $1.4 billion.

It envisioned $20.4 billion in new taxes, about $6.5 billion more than the president's January request, including such controversial elements as higher assessments on alcoholic beverages, limiting the federal deductibility of state and local income taxes and cutting the tax rate on capital gains.

The initial Democratic plan would have saved $50.3 billion in the coming fiscal year and $500.8 billion over five years, the sources said. Reflecting their priorities, Democrats sought a bigger military cut, $14.9 billion, and a smaller entitlement cut, $7.2 billion. Democrats argued the cost of the Persian Gulf mission should be considered separately and did not include it in their military spending level.

Medicare would have been pared by $3.1 billion and benefits for military retirees younger than 55 would have been frozen for one year, saving $250 million.

About $25.5 billion of the Democrats' savings would result from new revenues, including a 7-cent-a-gallon increase in highway fuels and a phased-in energy tax, sources said. The plan also called for an increase in alcohol taxes, but less than the administration sought.

Counterproposals were expected to be made as the bargainers met last night.

As work continues through the weekend, the budget retreat may not be as free of distractions as Gephardt had hoped: the club will be the site of two weddings and some banquets this weekend, according to general manager Tom Merrick.

And an administration official who said he wanted to watch today's college football game between the University of Virginia and Clemson University could get his wish: a big-screen television dominates one corner of the bar-turned-meeting room.

The room, which has a garish orange-and-brown carpet, has windows along three walls. One set overlooks the club's indoor pool, but the curtains were drawn shut yesterday.

Bargainers were encouraged to dress casually and are being offered sleeping accommodations in a neighboring visiting officers' quarters. Few said they would take advantage of the hospitality. "Emphatically no," declared Senate Budget Committee Chairman Jim Sasser (D-Tenn.). "I'm away from my family so much in this job anyway."

But House Budget Committee Chairman Leon E. Panetta (D-Calif.) said he planned to bivouac at the base. Panetta, whose wife lives in California, shares a Capitol Hill house with Democratic Reps. George Miller (Calif.), Marty Russo (Ill.) and Charles E. Schumer (N.Y.). "It doesn't make any difference," he said.

Judging by appearances yesterday, most lawmakers interpret casual dress to mean dark business suits. Only House Ways and Means Chairman Dan Rostenkowski (D-Ill.) took the directive to heart. Wearing a white windbreaker over a brightly colored striped polo shirt and tan slacks, Rostenkowski looked more appropriately dressed for bashing a golf ball, a favorite pastime, than squabbling with Republicans.

Staff aides also were reluctant to let loose sartorially. For many, their only deviation from the standard Capitol uniform was to not wear a tie. A top Gephardt aide, though, went all out, appearing in a black designer polo shirt buttoned to the collar, bright white pleated pants and chestnut-brown suede shoes. "You should have seen him before he took off the jacket," murmured a dazzled colleague.

Congressional aides are operating under a strict quota system that could lead to some tag-team staffing. Each lawmaker may have only two in the bargaining room at any given time. Extra staff must wait in a holding room and, if needed, can only enter the negotiations if another one leaves.

While the budget negotiators occupy the Officers' Club bar, portable bars have been set up around the club to sustain thirsty Air Force officers. How do the proud men and women of Andrews feel about giving up their watering spot to budget negotiators?

"We're just making the ultimate sacrifice for the effort," said one.