THE $66.5-BILLION surface-transportation bill that will soon come before the House of Representatives is an awful piece of legislation that should not be passed. The level of spending it authorizes on highways over the next five years is clearly inflationary. The number of pork-barrel projects it contains ought to embarrass even the most hardened legislator.

The bill has had a curious history. After it cleared the House Public Works Committee last May, it was held up for months in the Ways and Means Committee. That was because some members objected to the way the bill treats the Highway Trust Fund. It authorizes spending from that fund about $4 billion more a year than the fund will receive in tax revenue. The Public Works Committee justified this deficit on the grounds that the trust fund has a large cash balance. These high levels of spending, the committee also argued, are essential to finishing the interstate highway system and to keeping those and other roads in good repair. The objections finally faded after Rep. James J. Howard (D-N.J.), whose subcommittee drafted the bill, agreed to a floor amendment to cut trust-fund spending by $1 billion a year. That leaves the trust fund with authority to pay out only $3 billion or so more than it takes in each year, a situation that is inflationary by anyone's definition.

Even with the cut accepted by Rep. Howard, the bill will still authorize $10 billion more for highways over the next five years than the administration sought. Most of this money is earmarked for the repair of bridges, an item for which the administration requested $450 million in 1980 and $500 million in subsequent years.Rep. Howard's bill originally set the bridge-repair level at $2 billion a year, although he has now agreed to cut it to $1.5 billion.

Among the more interesting pork-barrel projects in this bill is one of $30 million for a demonstration project involving the use of "high-speed water-borne transportation equipment" between Sandy Hook State Park in New Jersey and New York City. The bill originally called for "jetfoil transportation" between the two points, one of which - Sandy Hook - just happens to be in Rep. Howard's district. There are other such projects - a highway bypass around Prairie Creek Redwood State Park in California, a study of the need for an additional bridge over the Columbia River west of Porland, Ore., a rural public-transit demonstration project near Sherman or Denison, Tex., and so on. Any member of the House who doesn't have a special project in this bill ought to feel shortchanged.

If that is not enough to explain why the bill should be roundly beaten or vastly amended by the House, there is the matter of what it does to the highway beautification act of 1965. One of its provisions, said by the Public Works Committee to clarify the law, appears to prevent state and local governments from eliminating billboards along interstate highways by the simple exercise of their police powers. Instead, it would require those governments to pay federal compensation rates for the removal of billboards. That, and a couple of other provisions backed by the advertising industry, have led critics of this legislation to call it the Billboard Protection Act of 1978. A better title would be the Bridges and Other Pet Projects Protection Act of 1978.