U.S. Urged to Aid Soviets, E. Europe : Congress: Rep. Gephardt outlines a program to nurture emerging democracies. He accuses Bush of a leadership failure.

In the first substantive Democratic response to the upheaval in Eastern Europe, House Majority Leader Richard A. Gephardt on Tuesday outlined a broad program for U.S. assistance to the emerging democracies in what used to be the Soviet orbit and to the Soviet Union itself.

In making his proposal for economic aid and cultural bonding, Gephardt chided President Bush for what he called a failure to demonstrate the vision and imagination to take advantage of the far-reaching opportunities presented by the easing of Cold War tensions.

“With peace breaking out the world over, why is our President intent on beating plowshares into swords?” Gephardt asked a breakfast meeting of the Center for National Policy, a Washington-based Democratic think tank.

After the speech, Gephardt told a reporter that the proposals he outlined--including exchange programs, exports of farm surplus and creation of a consortium of nations to promote trade and economic development--have the support of House Speaker Thomas S. Foley (D-Wash.).

Gephardt aide Tom O’Donnell said the majority leader is attempting to establish a policy foundation for the Democratic legislative agenda on Capitol Hill. He also appeared to be laying groundwork for Democratic candidates in the mid-term elections who face the handicap of Bush’s high standing in the polls.

“He’s putting out some ideas that we need to respond to the Republicans,” O’Donnell said. “He also thinks that the country is at a crucial juncture and somebody needs to lead.”

Gephardt charged that the President has allowed his policies to be shaped by the tides of public opinion without striving to use his office to mold that opinion in ways that would help build support for new initiatives.

“What we are left with is government of the polls, by the polls and for the polls,” Gephardt said. He acknowledged that public opinion appeared to be unwilling at present to sanction bold new initiatives in Eastern Europe, but he blamed this attitude on Bush’s approach to leadership.

“He is not explaining and interpreting these startling events for them (the public),” Gephardt said. “He is not helping them understand the new world we live in--its challenges, its opportunities, its dangers.”

Gephardt made recommendations in these major areas:

Aid to the Soviet Union. “Stability, democracy and a market economy in the Soviet Union are in America’s strong self-interest,” Gephardt said. He praised Bush for giving political and moral support to Soviet reform, but also called for substantial investment by American farmers and businessmen. In addition, he proposed waiving trade restrictions and providing loans to the Soviets from the Export-Import Bank and the Overseas Private Investment Corp.

Agriculture. Gephardt called for increasing the role of American farmers in promoting change in Eastern Europe and the Soviet Union itself “through a food for freedom” program. In most cases, the food would be provided at discount prices. Under the plan, proceeds from sales of the food by the governments would be used to foster private ownership of farms and improve food distribution. The program would also try to relieve short-term food shortages in Eastern Europe.

International exchange. Gephardt envisaged what he called a “freedom international program,” which he described as “a modern-day Berlin Airlift, bringing planeloads of people across the Atlantic in both directions.” The program would encompass leaders in religion, education and politics, and would sponsor conferences in such varied fields as environment, the arts and military.

Technical and managerial assistance. The $938-million aid legislation enacted in 1989 to help Poland and Hungary would be expanded to cover all of Eastern Europe, including Czechoslovakia, Romania, Yugoslavia and East Germany. Technical assistance, food supplies, trade concessions, environmental improvement, commercial credits and Peace Corps programs would be stressed.

Trade and economic development. To bring together on a regular basis the leaders of the major trading democracies, Gephardt proposed creation of a new multinational body called a Union of Nations for International Trade and Economic Development (UNITED). It would address economic issues from fostering growth of Eastern European economies to laying down new trade regulations.

The Bush Administration already is providing technical help to the Soviet Union and has begun negotiations with Moscow to hammer out the trade and investment agreements that are required before the United States can waive current trade restrictions. Bush also has agreed to extend the 1989 aid program for Poland and Hungary to other East European countries, but only after they begin moving toward genuine democracy.

On Gephardt’s proposal to create a new organization to handle economic issues relating to Eastern Europe, Bush is relying on existing international organizations such as the International Monetary Fund and the World Bank. He has signaled that the United States will join its allies in establishing the new European Development Bank, now being created to make loans to East European countries. The United States is also helping its allies to provide technical assistance and training for East European countries.

Gephardt’s address was warmly received by the Democratic activists in his audience. “Finally, there is a Democratic response to George Bush,” said Rachelle Horowitz, political director of the American Federation of Teachers and a longtime member of the Democratic Party’s National Committee.

Times staff writer Art Pine contributed to this article.