IS SEN. Alan Simpson trying to bury a bill that he has sponsored and supported for three years? That's what some Hill sources and lobbyists are afraid of. The bill in question is a major overhaul of the law governing legal immigration, which was last revised in 1965. Immigration subcommittee chairman Sen. Edward Kennedy and Sen. Simpson worked together on this project, as they had done so well in 1986 on a measure governing illegal immigration, and the Senate has twice passed their bill. This year, the House acted too, though not until Oct. 3. Then the bill seems to have lost momentum: a formal conference is yet to be convened, Sen. Simpson doesn't like the House version of the bill, and time is short.

Both the Senate and House bills accomplish two important objectives. They provide for a large increase in the total number of family-related immigrant visas and create new places, in addition, for those who have skills needed in this country but who do not qualify as relatives. The House bill is more generous in terms of overall numbers, which is a good idea and one that deserves support, not the ax. Sen. Simpson is at least willing to compromise on these numbers. In the informal, pre-conference meetings that have been held this week, for example, he has agreed to a figure that is about halfway between the House and the Senate provisions and far above current levels of immigration.

But he is not so amenable on other matters. The House also wants a generous new amnesty for illegal immigrants, which the Wyoming Republican calls an unacceptable retreat from the agreement forged in 1986. He is playing hard ball here and has countered with a proposal of his own directed at curbing illegal immigration. The best that can be hoped of this is that it is only a bargaining chip and that he is willing to withdraw his initiative as part of a compromise agreement. Time is the critical factor, and the senator probably can sabotage a bill at this late date if he chooses to do so. With only a week left in the session, conferees should be willing to compromise or postpone peripheral issues in the interest of saving a bill with a badly needed central core.