THE SITUATION with the District's fiscal year 2000 budget is growing more worrisome. On Thursday the Senate followed the lead of the House and adopted the D.C. appropriation conference report along largely party lines, 52 to 39. Normally passage of a D.C. measure would be good news. In this case, however, White House aides and D.C. Del. Eleanor Holmes Norton are urging the president to reject the conference report on home rule grounds. Indeed, the bill has several objectionable features that make it veto-bait. But where does that leave the District?

Veto proponents are counting on a better D.C. bill emerging in the administration's final negotiations with Congress over the city's and other appropriations bills. They reason that, at the end of the day, the GOP-led Congress will be forced to compromise with President Clinton on a host of critical spending issues, including the District's budget. Under that scenario, Congress will relent on some D.C. social riders, allow the city to keep money added for several popular programs and permit the city to walk away wealthier and unburdened by unwanted legislative baggage.

Rep. Thomas Davis III (R-Va.), chairman of the House Government Oversight subcommittee on the District, and one of the District's few GOP friends on Capitol Hill, believes the veto advocates are gambling with the city's future. Republicans, he contends, are in no mood to spend much more time on the District's budget, let alone fund or give a pass to programs they find objectionable. "If there's a veto, I'm afraid some of this money in the budget won't make its way back to the District," he warned.

Both sides are making dire predictions if the other side prevails. It would be tragic if the District ended up caught in the middle. The city needs money in the bill for the college tuition support program, cleanup of the Anacostia River and crime-fighting. And it shouldn't have to limp along on a congressional resolution until a final budget is negotiated down the road. The District did its part by sending the president and Congress a balanced budget with a surplus and tax cuts. Now it's time for national leaders in Washington to give the District the bill it wants, and then leave the city alone.