SINCE JANUARY, there have been plenty of words of alarm spoken about the District's financial condition. But the D.C. City Council has had little or no reaction to the problem, which may pose the biggest challenge a home-rule government has yet faced. On March 10, Mayor Barry presented the council with his proposals for resolving the prospective budget deficit of over $170 million for this fiscal year. The proposal brought no response from the council. Today, almost a month later, the council has neither approved the mayor's proposed program and budget cuts nor opposed them. At hearings on the supplemental federal payment for the District, some citizens have deplored the mayor's plans to cut some programs. But the council as a whole has remained silent on the question of what to do about the District's shortage of money.

Spokesmen for Arrington Dixon, chairman of the city council, say the council has not acted on the mayor's proposals to save money because it has no legal authority to challenge the mayor's plans. That plan includes proposals to shut some recreation centers in the city, reduce the number of guards at Lorton and reduce the budget for the public shcools -- proposals that would have a major impact on the city. According to members of Mr. Dixon's staff, it would be inappropraite for the city council to review these proposals because the mayor's counsel, Judy Rogers, is of the opinion that the mayor has the power to reduce budgets for city agencies and reporgram city money without consulting the council. Members of Mr. Dixon's staff say this legal opinion leaves the council no part to play in deciding how to resolve the budget deficit. They note, however, that tax increases must be approved by the council. So council member John Wilson is currently negotiating a tax package with the mayor. Council hearings on those tax propsals will be held later this month.

Mrs. Rogers' opinion does not justify the council's inaction. Even if Mrs. Rogers' opinion were to withstand a challenge by the council (and it has not even been challenged), the council could be shining a bright light on the mayor's plans for budget cuts by means of hearings and votes that would answer important questions such as, "Is the closing of recreation centers the best way for the city to save money?" The council, however, seems almost happy to sit back and say, "Our hands are tied." Only council members John Wilson and Betty Ann Kane have challenged the mayor's proposals with ideas of their own. But the council, as a group, has left an empty space where its leadership should be. In this it is failing the city miserably.