THE CENTRAL issue in the last Congress was the budget. The defining issue in the next will be Congress' own integrity, as reflected in the corrupting system of campaign finance. Reform can be put off no longer. The House Democrats are the problem. They passed legislation last session, but neither the legislation nor the majority that passed it was serious.

It is up to Tom Foley and Richard Gephardt to move a bill along. They say they favor reform but haven't produced. The skill with which they maneuver on the margins of the questions of war and taxes in the coming months will not be the abiding test of their leadership; this will. The Senate Democratic leaders produced a serious bill in the last Congress and can be expected to do so again.

The president will not take the lead in pushing the needed comparable legislation through the House and, subsequently, through the House-Senate conference. On the contrary, he is a resister, saying the partial and possibly indirect public financing that is the key to reform will somehow contaminate congressional campaigns, even as he prepares to accept much larger amounts of public financing in his own campaign for reelection. The House Republican leadership can't be looked to either. It is divided on the subject. Bob Michel has shown a constructive disposition to negotiate, but others in the party would rather score debating points than change even a system that helps to keep them in the minority status they constantly deplore. The Democrats must produce the necessary bill, and with a majority of 100 votes you might think they could.

The basic distortion in campaign finance is how much money candidates now feel compelled to raise; the related problem is where they turn to get it. The average Senate seat now costs more than $4 million; a closely contested seat in a populous state can cost three times that. Senators spend half their time with their hands outstretched; the Keating case is but one illustration of the depths to which that leads them. The answer is spending limits, which for First Amendment reasons the courts have said must be voluntary. As a practical matter that means that, as in presidential campaigns, candidates must be offered some form of public financing to induce them to comply. Republicans say this would put them at a disadvantage, but it is hard to see how.

Both the House and Senate bills included combinations of spending limits and public financing, though the Senate bill, which five Republicans joined 54 Democrats in passing, was in several respects more forceful. But the matter never went seriously to conference. The House bill also failed to deal credibly with the distorting role of PACs in House elections. These giving arms of the interest groups both tilt to incumbents and provide more than half of many members' financing; they are a large part of the reason why House incumbents of both parties had more than nine times as much campaign money available this year as did their mostly unsuccessful challengers.

The Democrats like a system that returns them so regularly to office. So do too many Republicans. But the system is wrong. It may not create the reality of a bought Congress; it surely creates the appearance. It has the potential of affecting legislative no less than electoral outcomes. We assume that the Senate will again produce its bill. The fate of the legislation will then depend directly on the willingness and ability of the speaker and Democratic leader to take up the challenge in the House.