When Cathy Taber, a publications editor at the Commerce Department, found out last August that she would be bumped from her GS 12, $30,000-a-year job to a GS 8, $20,000-a-year secretarial position because of budget cuts, she figured her only chance to fight back was something called the Merit Systems Protection Board.

For thousands of federal workers affected by the government's reduction in force (RIF) or other job disputes, the board generally functions as a court of last resort, and in Taber's case it decided to reinstate the 10-year civil service veteran to the level of a GS 11, with no loss of pay.

RIF cases like Taber's have helped triple the board's workload in recent months, but in Washington few agencies are safe from the budget ax. Last month board officials found out that they, too, would have to make significant cuts and institute economy moves, and the result may be a longer wait for many workers trying to keep their jobs.

Moreover, board officials say, the in-house economies they have been forced to make will end up costing the government more money overall.

To stretch its funds through March, the board announced last month that it will no longer send hearing officers into the field to hear worker-agency disputes; instead, witnesses in such cases will have to travel to one of 11 MSPB regional offices in the country.

"It's not saving money at all," argued MSPB spokesman Lon Anderson. "It will cost the government more, but the agencies will have to pay to travel--we won't have to pay."

In addition to the travel restrictions, the board temporarily suspended hearings and began charging for hearing transcripts to avoid "going broke" after Congress recently cut its $15 million budget by 16 percent, according to MSPB managing director Richard Redenius.

In the Washington area, where there are nearly 400,000 federal workers, most government employes will be able to use the regional office in Falls Church, so the travel restrictions will not pose too great a hardship here. But for federal workers seeking a speedy resolution to their complaints of unfair treatment by agency managers, the board's new financial woes could not have come at a worse time.

Government cutbacks have caused a general upheaval among federal workers, resulting in a sudden surge in RIF, retirement, disciplinary and other personnel cases. Individual appeals have kept the board's full-time staff of 340 swamped since September, and its normal yearly caseload of 7,000 has soared to nearly 21,000.

In the area of RIFs alone, the spurt of dismissals, downgradings and reassignments meant the new year began with a backlog of 953 such appeals, compared to a usual total of around 500 to 700, a board spokesman said. With RIFs expected to total more than 20,000 by the end of fiscal 1982, the board will have its hands full.

"In 1982, that's when you'll see the problem," said Redenius, who notes that the board began to be snowed under in late 1981 when the first round of RIFs took full effect and many of the 11,000 fired air traffic controllers filed appeals.

Given the current backlog and board budget cuts, "federal employes will be hard pressed to invoke any of their rights," said Robert Honig, staff director of Congress' bipartisan Federal Government Service Task Force, which has been monitoring RIFs. He said the MSPB was one of several small agencies and boards to get caught up in hurried budget cuts made in mid-December as Congress was adjourning. Some of the cuts are expected to be restored and the board is hopeful its financial distress will be temporary.

The board, which began operating in 1979 as part of Jimmy Carter's Civil Service Reform Act, plans to resume holding hearings in February. It is responsible for overseeing the general operations of merit systems and has conducted several studies for Congress and the president on sexual harassment, merit pay, the Senior Executive Service and whistle-blowing reprisals.

About 85 percent of the board's work is devoted to individual appeals of adverse personnel actions, most notably RIFs.

"It's an epidemic," said Joel Bennett, an attorney who has handled several RIF appeals for anxious federal workers. These employes, he advised, have the best chance for overturning or modifying unfavorable job actions if they can show that proper personnel procedures were not followed or that they could be trained to perform a new job within 90 days without undue interruption to the agency.

The hearings themselves generally take just one day. Although the atmosphere is usually less contentious than a courtroom, the agencies and the employes do bring in their own witnesses who argue whether the personnel action was handled properly and fairly.

The burden of proof in an appeal is on the agency, Bennett said. By statute, a MSPB hearing officer in the regional office where the appeal is filed must make an initial decision in a dispute within 120 days. In about 25 percent of the cases, a hearing officer's decision is appealed to the full board, which normally has three members but has been functioning with two pending presidential appointment of a new chairman. If dissatisfied with the final decision, an employe can go to the federal Court of Appeals; an agency cannot.

Employes generally win about 25 percent to 30 percent of all appeals, a ratio that a board spokesman says is better for workers than the old Civil Service Commission, which tended to sustain the agency action in 90 percent of the cases. RIF reversals run about 6 percent to 24 percent in various agencies, according to the board.

Bennett said the cost of a board appeal can run $2,000 to $3,000 by the time an employe pays an attorney and hires a personnel consultant to testify at the hearing. Even if they win, employes do not get attorney fees and court costs back unless they can prove they were the victims of discrimination or bad faith on the part of the agency. Without union representation, he said, the expense can be a hardship.

"But if you're a top GS 15 chemist who's suddenly been downgraded to a GS 9 budget analyst," argued Bennett, "it's certainly worth the expenditure to fight it. And if you're being separated dismissed , you have even more at stake."

For the federal workers directly involved, the concerns are for their personal and economic future.

Taber, for example, knew that Civil Service regulations would have allowed her to collect her regular GS 12 pay for two years. But unless she had been able to overturn or modify her downgrading, she was facing a $10,000 pay cut and a drastic change in duties.

"The board was my only recourse," said Taber, a 36-year-old District of Columbia resident who now is on special assignment for the President's Task Force on Private Initiatives. She received legal assistance in her RIF appeal from the American Federation of Government Employees and is set to return to Commerce in a year at a job comparable to her old one, thanks to the board's action.

Susie Gustavson, a 39-year-old safety inspector who lost her job at the Occupational Safety and Health Administration (OSHA) Sept. 11, is still trying to get her MSPB appeal hearing scheduled.

"I've been through two 30-day periods without pay," said Gustavson, who lives in Annandale. She was a $25,000-a-year GS 11 with 16 years of government service when the Department of Labor closed its OSHA office in Falls Church and told her to transfer to Charleston, W.Va., as a GS 7, making around $17,000. She argues she should be considered for work in the Washington OSHA office or elsewhere in government here.

The merit board, noting that she was directed to report to West Virginia, transferred her case to its regional office in Philadelphia. Gustavson terms that choice "ridiculous . . . I'm sure they have a hearing officer in Washington."

Single-mother Gustavson hopes to win back her government job, particularly since she is the sole support of three teen-age daughters.

"Once I get them raised, it won't be much of a problem," she said, "but I have to think of my family."