IN TIDING up the loose ends in its budget reconciliation bill this week, the House Ways and Means Committee struck a retaiatory blow against the Finance Committee's earlier shift onto heavily urban states of several hundred million dollars of Medicaid cost. In order to meet its budget quota, Ways and Means responded by proposing to cut federa welfare payments in predominantly rural states.

In both cases the weapon employed was the formula used to determine federal sharing in Medicaid and (except in two states) Aid to Families with Dependent Children. The committees simply wielded the weapon from opposite ends. Finance proposes to lower the floor on Medicaid sharing -- which now protects urban states from the unfairly low-cost sharing rates that the formula, because of its peculiar construction, would otherwise produce.Ways and Means, by contrast, proposes to put a 57 percent cap on the AFDC sharing rate that now ranges up to 78 percent, thereby saving on federal payments to 26 rural states mostly in the South and West.

Since the federal cost-sharing formula is, in fact, overly generous to rural states because of th inordinate weight it gives to relatively small differences in average income, some adjustment could be defended on the grounds of pure fairness. This is particularly true since some of the the states most affected, such as Texas and Louisiana, are flush with oil and other resource extraction riches and could well afford to contribute more generously to their abysmally stingy AFDC programs. But if history is any guide, those states that could afford to maintain their benefits with less federal help won't choose to do so, while other truly poor states won't be able to make up the loss.The Ways and Means Committee's proposal is thus likely to produce a substantial reduction in help for the very poorest families in the country.

As in the case of the Finance Committee's action, it will be very difficult to reverse the Ways and Means decision under the strict rules that are likely to govern floor action on the omnibus reconciliation bill. Failing a reversal in the House, the last chance for compromise will be in the giant conference between the Senate and House in which the myriad differences between their respective measures are to be worked out.

There is a warning note in all this that carries beyond the immediate actions of the two committees. This is the possibility that, at a time when substantial regional shifts in federal spending are in the offing, the limitations that the budget process places on legislative consideration by the full Congress will greatly increase the opportunities for war among the states -- waged at the committee level.