DEL. WALTER FAUNTROY's proposal for getting the city out of the current crisis-state of its financial affairs is the best proposal yet on that difficult subject. Since the city discovered it had real money trouble last January, there have been several proposals by the mayor and city council. The mayor's latest proposal, announced last summer, has yet to be acted on. The prospects for its success are not good anyway, because the Republican Senate and administration do not seem about to give the city access to the Federal Financing Bank, which is the centerpiece of the mayor's plan.

The outlook is not good for the city council's latest plan for resolving the city's money problems either. That plan comes from Finance Committee Chairman John Wilson. His idea is a package of far-reaching taxes that further add to the already heavy tax burden on residents and businesses in the city. Added taxes may eventually be needed to get the city out of trouble, but Mr. Wilson's proposal seems so harsh it could do damage to the city's economy generally even as it cured certain immedicate ills.

Mr. Fauntroy's proposal, on the other hand, seems likelier to succeed because it places the burden for the remedy on the city, not on Congress. And importantly, the burden would not be so great, under Mr. Fauntroy's proposal, as to leave the city crippled. The delegate's plan is to have the city obtain loans, ideally from banks that operate in the District, to retire the accumulated deficit of $215 million. With that deficit under control, the threat of the city's operating budget's collapsing -- causing checks to bounce and employees to go unpaid -- would be eliminated. The loans from District banks would be repaid in future budgets with revenues from one tax set aside -- the sales tax, for example -- to ensure that there is money to pay off the loans. Even better for investors is the promise of the federal government's guaranteeing the loans. The guarantee promises that even if the city should default on payment of the loans, the federal government would make good on the money.

Of course, Mr. Fauntroy's proposal is likely to face opposition in Congress, where it has been said that the District is in better shape on umemployment and other indicators of economic need than many other American cities. So why help the District? One simple reason is that the city is the home of the federal government and must be a functional city with a functional budget if it is to be a stable home for the federal government's operation. Then too, the District is by no means a boom town, as some might assume by looking at the crop of office buildings springing up downtown; but more on that later. It is sufficient to say at this time that the District needs some federal help, and the federal government has a direct interest in keeping the city afloat.

To get the city that help, Mr. Fauntroy is proposing a minimal amount of congressional assitance: loan guarantees.Unlike the mayor's proposal to have Congress grant the city access to low-rate loans from the Federal Financing Bank, the delegate's loan guarantee proposal should cost the federal government nothing except in the highly umprobable event that the District government's finances collapse. And unlike Mr. Wilson's plan, the delegate's idea does not threaten to damage the city's economy.

At this point, the mayor and Mr. Wilson should support the Fauntroy plan instead of continuing to promote their own plans. Congress also has reason to support Mr. Fauntroy's idea because, unlike other plans involving federal assistance, the real sacrifice under his plan will be made by people who live in the city as they forgo city services to pay off the loans. The federal guarantee is a minimal commitment of help to the city from its major industry -- the federal government. It is not a bail-out.