Conferees reached an impasse on abortion yesterday and agreed to go back to the House and the Senate for instructions.

It was the second year in a row that the House wrote in a tough curb on free federal abortions for low-income women, the Senate sought to loosen it and the conferees clashed in disagreement.

The House language, tacked onto the multi-billion-dollar funding bill for the departments of Labor and Health, Education and Welfare, would permit free federal abortions for Medicaid beneficiaries only to save the life of the woman. The Senate version would permit them for any "medically necessary" purpose, in cases of rape or incest, or to save the life of the woman. Abortion foes contend the Senate language is so broad it would allow a doctor to label almost any situation where a woman wants an abortion as "medically necessary."

Several conferees predicted that Congress eventually would end with the compromise language it adopted last year, but only after a new series of back-and-forth votes. The compromise would allow an abortion to save the life of the woman, or in cases of rape or incest, or where the pregnancy would result in severe, long-lasting physical health damage to the woman.

Conferees spent most of the day debating money issues on the $56.8 billion funding bill. They agreed to languages by Rep. Bob Michel :R-Ill.) instructing HEW to cut $1 billion in waste fraud and financial abuse from its program, thereby reducing new spending authority under the bill to $55.8 billion.

Conferees also took these actions on key issues, although they left other issues undecided:

Dropped a House provision to bar agencies funded by the bill from forcing racial quotas or other numerical requirements on colleges and schools.

Provided $2.686 billion in Title elementary and secondary education grants, about $100 million over the president's request.

Compromised on $816 million in impact aid, a cut of $40 million from the administration's request.

Provided $917 million for the National Cancer Institute, $60 million over the administration's request.