IN AN oddly timed news conference last month on the budget talks with Congress -- the talks and Congress were both in recess -- President Bush slipped in a veto threat on campaign finance. Not only were members of the Democratic branch voting larger domestic appropriations than he wanted, the president said, the Senate was asking that taxpayers put up millions to finance congressional elections. "And let me be clear on that one," said the beneficiary of similar millions in the presidential election. "I oppose adding this kind of taxpayer financing of congressional elections, and I'm going to veto any such bill that appears on my desk."

But campaign finance is not a budget issue, and this was a bad position for Mr. Bush to take. The Democratic majorities in both houses have passed, with some but not much Republican help, bills to overhaul the present system of finance. The Senate bill is better, but the House legislation is similar to it in many respects, and a decent compromise that would make the system presentable while also taking Republican misgivings into account is easily possible. The obstacles are neither intellectual nor partisan but rather a flow of funds that has too many purring members of both parties feeling warm and content.

The one issue that is not negotiable is excess. The price of office has become too high. No reform worthy of the name can leave out spending limits. But for good First Amendment reasons, such limits have to be voluntary, meaning there have to be inducements for candidates to comply. The best inducement is the one used in presidential elections: federal funds. In deference to Republican objections, the Democrats went to great lengths to limit such funding and keep it in kind, in the form of such things as TV vouchers and cut postal rates, instead of in cash.

The Republicans, who are the better fund-raisers, still say -- wrongly, we believe -- that limits and partial public finance would work to the Democrats' advantage, since challengers, most of whom in a Democratic Congress will be Republicans, have to outspend their rivals to win. This is the nearsighted party view that the president was supporting in his news conference. But he didn't quite spell it out. Does he really want to be against a bill merely to moderate the money chase that so disfigures congressional politics? Is that where the Republican Party wants to be?

The Democrats should hasten to conference. There they should continue to try to accommodate the Republicans, who have already, in the process of objection, made important contributions to the bill -- and finally they should send the president a tough and balanced proposal. The parties can work out a better system if they will. In any case, progress will have been made; the issue will be farther along in the next Congress.