THE FEDERAL Election Commission, the toothless tiger that is supposed to keep order in the jungle of federal campaign finance, has before it two matters that will test its resolve. One is a request for an advisory opinion to allow political action committees to "bundle" contributions. The other is a rule-making proceeding, forced by a federal court decision disapproving of the agency's refusal to issue rules regulating "soft money." The first request the FEC should deny; the second it should act on.

What two Life Underwriters PACs are asking in the bundling case is outrageous. Federal law limits PAC contributions to campaigns to $5,000 and individual contributions to $1,000, and it allows PACs to encourage their constituents to give individually. There is nothing in the law to stop PAC officials from "bundling" such individual contributions together and getting credit with the candidate for giving more than the limit, but leaving no trace of this extra influence in the disclosure records.

The campaign finance law killed in the Senate earlier this year had a provision to discourage bundling by counting such money against a PAC's $5,000 limit. That's a good idea, although it's hard to write a prohibition that a nimble PAC couldn't get around. The underwriters want to go in the other direction, to allow the corporations and associations that are the parents of PACs to spend unlimited amounts to solicit personal contributions, which the PACs can then bundle. To this the commission's answer should be a firm no.

"Soft money" presents more problems. The term refers to contributions technically made to state parties or candidates that are legal under state law but would be illegal under federal law. In practice, the national parties collect millions in soft money and use it for purposes that benefit federal candidates. The FEC can't rewrite state campaign finance laws. But it can require that contributions that are centrally collected and centrally disbursed be centrally reported.

The commission's refusal to do this was properly rebuked by a federal court decision last August. The FEC should take this new opportunity to do what it should have done in the first place and provide for full disclosure of soft money. There is, in the meantime, nothing to stop the Democratic and Republican national committees from making such disclosures voluntarily, as requested by the Center for Responsive Politics. In the past, the Republicans have made partial disclosure, and the Democrats, to their shame, have made practically none at all. Will either of them do more before the FEC acts