Rep. Marjorie Holt (R-Md.), who prides herself on her reputation as a tough budget-cutter, spent more than a year pushing the Pentagon to spend $13.7 million renovating a military hospital that Navy cost-cutters wanted to close.

Holt finally lost the battle when the Navy Department announced it would convert the Naval Academy Hospital, built in 1903, into an outpatient clinic and reduce the staff by half.

The issue of the Annapolis hospital confronted the staunchly conservative Holt with a political dilemma faced by all members of Congress at one time or another: what to do when one's views policy conflict with local interests.

In this case, if Holt supported the cost-cutting proposals of Navy budget analysts, her constituents, including thousands of retired military personnel and their families, would lose a hospital to which they had become accustomed.

But if she fought to keep the hospital open, it would mean an expenditure of millions of dollars in federal money to bring the antiquated, rambling facility up to current health and safety standards at a time when taxpayers were clamoring for tighter federal budgets.

Holt, who finally lost her fight in March, sees no particular paradox in her position. She contends that Navy Department bureaucrats were wrong in their analysis of the situation. "My position was very consistent," she said.

Navy Secretary W. Graham Claytor's decision to convert the hospital into an outpatient facility was "shortsighted," she added, saying the government will spend more money as a result of the closing than it would have had if the hospital remained open.

A recent Navy study of a 36-bed facility indicated that the complex, with its 13 attached buildings and a staff of 168 - 59 civilians and 109 medical ocrpsmen - was poorly suited to modern medical needs and operated at only 50 percent of capacity.

Holt said, however, that the hospital seemed antiquated and underused only because the Navy intentionally let it run down.

"They were letting it go down," she said yesterday. "It was decidedly a move to phase it out."

Holt wasted little time making up her mind on the issue when, in 1978, the Navy announced that six of its hospitals, including the Naval Academy facility, would be studied for possible closure.

Over the next few months she spent hours jawboning officials at the Navy's department of medicine and surgery, and days taking some key colleagues on the Armed Services Committee on a tour of the facility.

She also lobbied President Carter, himself a Naval Academy graduate. "She helicoptered over to Annapolis with the president and banged his ear all the way there and all the way back about this," one staff member said this week.

At one point during the fight, Holt considered introducing legislation that would have exempted the Naval Academy Hospital from the law that gave the Pentagon authority to close it.

"We used every agrument in the course of a year you could imagine," one Holt staffer said this week. "Most of us [on Holt's staff] viewed this as a non-partisan issue.

This was the United States Naval Academy we were talking about. If the issue had come to a vote on the Hill, the staffer said, "we would have won hands down. But we couldn't go at them from the appropriations end because they were proposing saving money."

In the end, nothing worked.

The hospital halted in-patient care in June, keeping such well-used outpatient services as the eye clinic open.

"For a year before we closed, we had between 17 and 22 patients," said the hospital's outgoing administrator, Lt. Cmdr. Kenneth S. Snow Jr. "There were 21 cooks and food handlers, five or six receptionists...and the bottom line is it's an old, old, old facility."

Holt, however, said yesterday that many of the military officers involved with the facility told her privately they opposed the closing but were reluctant to speak out publicly because "Jimmy Carter doesn't like people to disagree with him."

And the underlying cause of the Annapolis hospital closing - a severe shortage of physicians in the military services - will only be worsened by the decision, she said. The academy hospital was a sought-after post, a drawing card for doctors who might join the military. "So they're adding to the problem, not correcting it," she said.

Finally, Holt said, the failure to keep the Annapolis military hospital open will eventually lead Congress to mandate construction of a new hospital at the academy - at a cost of $22 million or more.

"There's no question," Holt said yesterday, that that's what we're going to do."