SEN. HELMS is calling on his fellow members of Congress to make a "demonstration of good faith" by cutting their own pay and that of top government officials. Mr. Helms is right about Congress' needing to "reestablish some credibility with the people," as he put it. But he has chosen the wrong way to go about it.

Last year, you may recall, Congress finally approved a modest increase in pay for top civilian and military officials. For several years, the salaries of these officials had been more or less frozen while private executive salaries soared, and benefits paid to government retirees moved up sharply with inflation. The declining competitiveness of top federal salaries has contributed to the departure of many good federal executives--especially persons eligible for early retirement or who had skills in demand in the private sector. The problem had become so acute that the General Accounting Office estimated that raising the pay cap would actually save money simply because of reduced pension costs.

Congress had long resisted increases in federal executive pay for fear that its constituents would disapprove of the resulting increase in congressional pay that was tied to federal pay. That fastidiousness, however, did not prevent the members from voting themselves a huge retroactive tax break in the closing hours of the last session.

This for-congressmen-only loophole allows legislators to deduct from their taxable income--without documentation--at least $19,000 a year to cover the presumed additional costs of living in Washington. If a congressman goes to the trouble of actually itemizing and documenting his living expenses-- everything from home depreciation and furnishings to maid service could be counted--he might even avoid taxation entirely.

The congressional tax break is a standout atrocity in a tax code already littered with dubious preferences. The value of the deduction does not necessarily bear any relationship to the actual additional costs imposed on congressmen by their service here. It is worth most to those who spend the most lavishly and have the highest taxable incomes. Worse, it is a sneaky way for Congress to boost its own pay without seeming to, by exempting itself from the tax requirements it imposes on everyone else.

If Sen. Helms and his colleagues want to demonstrate their "good faith" to the voters, they could start by repealing their own outrageous special tax breaks. They should let top government officials-- who benefit from neither this nor the many other additional congressional perks--keep their much needed pay increase.