Bright outlook

Federal Reserve Board chairman Paul Volcker put the issue in just the right words. ''I think basically the economic outlook is bright.''

Mr. Volcker was commenting on what he felt had been an overreaction by the Wall Street financial community and the news media to his statement last week that failure to reduce federal budget deficits could eventually lead to a recession. The stock market registered sharp drops during the week, believed in part to have been linked to his comment - as well as a somewhat similar remark by Treasury Secretary Donald Regan that a new recession could occur without action on the deficits.

But as Mr. Volcker said later in the week, a recession does not seem likely at any time soon.

''The only way I can state this is that the basic outlook is encouraging,'' he stressed.

Mr. Volcker's remarks are helpful. They should ease investor concerns. The United States economy is strong. There is still time to do something about the deficits.

Did Congress and the White House also catch one other aspect of Mr. Volcker's remarks late in the week? That is, that given all the attention about deficits, a consensus may now be possible.

To reach such a consensus, the Reagan administration needs to be willing to reduce somewhat its large military program. Congress needs to make cuts in entitlement programs.

And both sides should be willing to consider raising taxes - election-year politics notwithstanding.