IN A LETTER on this page today, Philip M. Dearborn, the mayor's financial counselor, defends the Barry administration's decision to try to enter the bond market. His letter comes in response to an article by former city auditor Matthew S. Watson who suggested that the cost of going to the bond market makes it a bad option for the city. Mr. Dearborn argues that going to the bond market would be proof that the city is "free to solve its own problems and manage its own affairs."

It is surprising to hear the mayor's aides now disparaging any possible federal involvement in solving the financial crisis. Only a few months ago the mayor's aides proposed that the city solve its money problem by asking Congress for permission to borrow money from the Federal Financing Bank. More to the point, the federal government and the District government are bound together -- at least in financial matters -- no matter what the city's leaders may like to pretend. Less than a decade has passed since the federal government ran the city altogether. That history cannot be denied. For instance, in constructing any permanent solution to its budget woes, the District is going to have to get some federal help with the pension costs inherited from the days of total federal control of the city. t

The District's close relationship with Congress extends even to its attempt to declare independence by going to the bond market. If the city finds buyers for its bonds, an essential part of the attraction of these bonds will be the District's close relationship with Congress. That relationship makes it unlikely that the city would ever be allowed to default on bond payments.

To argue that the city should go to the bond market because that is what home rule demands does not seem good sense to us. It will cost the city about $600 million over the next 30 years to get $200 million from the bond market today. But by saving the money from the city budget -- the same amount that would go to interest payments on bonds -- and investing that money, the city could pay off the debt in less than 10 years. Does the mayor propose that the District pay $400 million for the next 30 years to satisfy the desire to say that the city is independent of Congress?

Mayor Barry has one more reason for wanting to go to the bond market. He says it is the only way to get the $184 million the city needs before the end of the fiscal year. He argues that there is no way to save that much money in the five months remaining in this fiscal year and that the city cannot legally borrow more than $30,000 a year under the city charter. It is also illegal, under the city charter, for the city to sell bonds to finance a deficit, but the mayor is asking Congress for permission to do that. Through short-term borrowing either from the Treasury or -- with the permission of Congress -- from local banks, the city could get the money it needs to meet immediate expenses without the burder of having to pay back $400 million more than it gets on the bond market. To repay the loans and fill the deficit gap, the mayor would have to cut spending or increase taxes, however. That is the straightforward way to deal with this financial problem. Home rule is not the issue in this game.