The close race and the budget-deficit derby

THE Democratic and Republican Parties, both houses of Congress, and Congress and the White House as institutions are now in basic agreement: As a practical - as well as political - matter, there must be quick action on a budget-reduction package to help reduce soaring federal deficits.

The reason for the consensus is clear: Washington political officials, most of them running for reelection, must show themselves hardworking stewards - able to manage the nation's fiscal affairs.

And in plain economic terms, unless steps are taken to reduce the deficit, upward pressure on interest rates stemming from heavy government borrowing could threaten or even derail the current recovery now under way in the United States.

This week the budget spotlight swings to the Senate. Senators took last Friday off so that some members could head out to Kentucky over the weekend for the annual running of the Kentucky Derby.

But they did so knowing that a number of important budget-related decisions were awaiting action.

Surely, it is now time for the Senate to follow the lead of the House - which has already approved an overall budget-reduction package - and enact a legislative package of its own.

The Senate should adopt as quickly as possible the White House deficit-reduction package now before that chamber. The President's plan would slash the deficit by $144 billion over three years.

We would agree with many economists that this plan by itself doesn't go far enough - particularly regarding reductions in defense spending. The overall House plan is more comprehensive: It would trim the deficit by $182 billion over three years, compared with the White House plan of $144 billion. But the important point is that any movement on deficits is better than nothing.

The Senate should clear the decks on the President's proposal and then move into conference with the House, where the differences will be resolved. The conference committee should go further.

One vital point: Congress must exceed what the administration proposes for cutting defense. The White House proposals would still mean a 7.8 percent real growth in defense spending.

That's too much.

Besides, the administration's cuts come in the wrong area - in conventional forces rather than in the strategic area.

Last week a bipartisan group of former top federal officials reminded Americans that a final deficit-reduction package is necessary by midsummer.

As former Commerce Secretary Peter G. Peterson, a member of the group, observed, it is crucial that a deficit plan be enacted by then to avoid the ''supercharged political atmosphere around the nominating conventions, which could prevent action'' until after the November election.

It is to be hoped Washington heard Mr. Peterson.