IT IS NOW painfully clear that the District government must decide quickly either to modify its proposal for a convention center or to set the project aside. House and Senate disagreement over the project has become the principal reason for congressional deadlock over the city's 1978 budget. Sen. Patrick Leany (D-Vt.), chairman of the Senate Appropriations subcommittee on the District, opposes the plan for a convention center, arguing that financial participation by the business community is inadequate. He has suggested that some demonstration of corporate financial commitment - either in cash or in land - would assure him there was broad support for the effort. On the other hand, Rep. William Natcher (D-Ky.), chairman of the House Appropriations subcommittee on the District, is a stalwart supporter of the present center plans, and has foought hard to keep the project in the budget.

The result has been an end to any productive discussion about the center - or about the city's 1978 budget. Worse, the 1979 budget has already arrived on Capitol Hill, but it can't be seriously examined since there are no 1978 bduget figures for comparison. Meanwhile, the city government seems reluctant to propose possible alternative plans for financing the center, for fear of losing the project altogether. It is true that the center could well be lost if it were dropped from this year's budget. But trying to keep it in the budget as is will not ensure its passage. On the contrary, there's every likelihood that continuing to press for the center as proposed will merely continue the congressional deadlock.

Instead of watching this battle from the sidelines, the city government should come up with new suggestions for the center's financing - some reasonable proposal to preserve downtown economic development plans while involving the business community to a greater extent than before. Otherwise, the city stands to lose much more than a convention center. The other programs and projects in the 1978 budget cannot, in the main, be undertaken until that budget is approved - and the cost overrun of construction projects to begin this year may not be picked up in negotiaitons over the next budget. Local leadership is going to have to decide just what it is willing to do to get the convention center - and at what cost to the city. In any case, time is running out. The deadlock in Congress and the pressures building to break it, one way or another, add up, in our view, to a last call for those who are serious about a convention center.