A public interest consumer group yesterday urged Congress to reject legislation to provide millions of dollars to companies that incurred economic losses when garments treated with the chemicl Tris were ordered off the market.

Congress Watch, a Ralph Nader affiliated group, made the plea on the eve of expected House action on the proposed legislation.

The federal government, which first ordered clothing manufacturers to fireproof children's clothing, banned the use of Tris as a flame retardent after it was discovered the chemical caused cancer in laboratory animals.

The government then ordered all clothing manufacturers to buy back at their own expense, any Tris-treated clothing they had sold.

But Congress Watch said the bill which passed the Senate in a broader form last January "is a bad bill that . . . would cast a long shadow over all health, environment and work place regulation."

In the statement, Congress Watch attorney David Moulton said "the industry is as much or more to blame for the losses than the government."

He pointed out that the government action ordering flame resistant clothing "did not mandate the use of Tris. The industry chose Tris because, in the words of a witness from the American Apparel Manufacturers Association, 'Fabrics which contained Tris met with the greatest level of market response - both in terms of the hand or feel of the garment . . . and in term of the price.'"

Moulton was also critical of the fact that at least some of the clothing manufacturers that would benefit from the bill were the same firms that tried to dump the Tris-treated garments overseas, at discount prices.

Proponents of the bill claim the clothing manufacturers were victimized in the entire Tris affair. They say that the manufacturers were forced to buy back all of the clothing of their own expense.