THE TELLICO DAM is to be completed and the snail darter has been saved from extinction. That sounds like a happy ending to a long and anguishing story in which the defenders of the dam and the mini-fish got what they wanted. But it's not. Tellico Dam is being finished in spite of the darter -- and because of it -- and a bad precedent has been set for any other politically popular project that happens to run afoul of existing federal laws.

The last chapter in the story was written this week when the president signed a bill that exempts the Tellico Dam from all the restrictions in all federal laws . Yes, you read that right. Those buildings it don't have to comply with the Endangered Species Act, of course, but neither do they have to comply with the Workmen's Compensation Act or the Clean Water Act or the Davis-Bacon Act or any other statute that sets the conditions under which other federal projects proceed.

This remarkable exemption seems to have arisen from the Congress' desire to demonstrate that a small fish has less influence than local interests and powerful politicains. It was, to understate it, overkill. Congress could have made the point simply by exempting the Tellico Dam from the Endangered Species Act. But the friends of the snail darter have been so vociferous and so cunning in their objections to the dam that Congress took no chances. It decided it wanted this dam finished regardless of anything else that might get in the way.

The truth is that the Tellico Dam should never have been begun -- snail darter or no snail darter. The 23 megawatts of electricity its water will generate are not worth the 14,000 acres of prime farm land that will be lost and the 348 homes that have already been demolished. Of course, the TVA'S original report (in 1967) on the dam said the benefits would outweigh the costs. In those days, those reports almost always said that. The current economic report tells a different story, but Congress, in its passion to be done with the snail darter, paid little attention.

The issue in the Senate, where the final, critical debate took place, was not the snail darter, although it is hard to discern that from reading what was said. The issue was whether Congress would override the restrictions on federal projects it has approved and the mechanisms it has created for resolving disputes about those restrictions. The answer was that it would -- if someone cared enough to push the matter as did the Tennessee delegation, and if a convenient scapegoat like the frenzy over the snail darter was available.

In one sense, the defenders of the snail darters have won; those fish presumably will live on in the new habitat that has been found for them. But in a larger sense, the environmentalists have lost. Congress and the president have agreed that one dam-building project is too important to be encumbered with all those fine-sounding environmental and safety protections that have been enacted in recent years; if they can do that once, they can do it again . . . and again.