THE GREATEST unmet need of the nation's poor is decent housing. Neither they nor the government can afford it. This week a humdrum bill that would have done relatively little to solve the problem was sidetracked in the Senate on grounds that it was a massive budget-buster that would have done too much. Thus does the deficit now consume and distort our politics.

Everyone lied a little about this bill. The sponsors, chiefly Democrats, tried to have it both ways, to appear generous and frugal at the same time. Thus they described it as a housekeeping bill, intended to do no more than tidy up and maintain current services, not a cut but not an increase either. But it turns out that under the definitions used in the budget process, current services for the basic housing program for the poor means not the same level of services as last year but the same rate of increase. So this standstill bill began with a forward lean.

Then various lesser programs were adopted, all adding to cost. The total would indeed have busted the budget. To keep the programs in but the price tag down, the legislators resorted to a series of asterisks so that most of the add-ons would likely either not be funded or be funded at the expense of the basic program.

The proponents thus minimized the cost of the bill. The administration and some Senate conservatives, whose goal is not to expand but to abolish some of the major programs in this cluster, took the opposite tack. They ignored the asterisks, took all the bill's promises literally and maximized the cost; the president threatened a veto. The sponsors said it was a $15 billion measure. The administration, which had asked for $11 billion in its budget in January, said $19 billion. Who would want to vote for that large a seeming increase in a week of weighty deficit-reduction talks?

Our sense is that the conservatives are right that some of the programs in the bill should be abolished. An example is what remains of the Urban Development Action Grants, Jimmy Carter's sop to the cities. But those who also want to pull the government even further than this administration already aggressively has out of the costly business of subsidizing housing for the poor are wrong. The irony of the week's debate is that this all-too-ordinary bill, which may or may not be revived now, would do so little of the thing it was accused of. Symbol and pawn in a larger fight, it contained neither the housing nor the spending that the enveloping rhetoric suggested.