The old feud between Office of Management and Budget General Counsel Michael J. Horowitz and the leaders of nonprofit advocacy groups was reignited last week as summaries of the OMB's revised proposal to restrict lobbying by federal grantees circulated around town.

The original proposal to limit "advocacy" by nonprofit groups and government contractors proved short-lived. After its publication last winter, lobbyists and congressmen of all stripes joined in the hue and cry that led to its quick demise.

The new version, prepared in consultation with the General Accounting Office, eliminates one of the most objectionable provisions of the original OMB Circular A-122: the requirement that an organization's lobbying activity be physically separated from its government-funded work. But it still defines attempts to influence executive rule-making decisions as "lobbying," and stipulates that no federal funds may be used for that purpose.

"It defines day as night, rule-making as legislating," complained Art Burger, a former employe of a nonprofit research organization who now heads a group called "OMB Watch," organized after the first A-122 battle.

Nonprofit groups, such as an association of public health professionals, are created to serve clients, he said. One way of serving clients, Burger added, is informing them of federal regulatory proposals that affect them. The new proposal would still ban the use of federal funds to solicit comments on proposed rules.

Another worry is the new draft's scope. It applies only to nonprofit groups, who worry that they will be held to a different and higher standard than defense contractors. The OMB's Horowitz vehemently denies this.

A standard that applies to everyone "is our clear intent," Horowitz said, pointing out that defense contractor lobbying is already covered by a "defense acquisition regulation" promulgated last fall.

One private attorney familiar with both said the defense rule is "tougher in some respects, more lenient in others" than the new draft proposal for nonprofit organizations. LAYING THE GROUNDWORK FOR FISCAL 1985 . . . The Budget Review Board, the triumvirate of OMB Director David A. Stockman, presidential counselor Edwin Meese III and White House chief of staff James A. Baker III, has told domestic agencies they should plan to spend no more discretionary money in fiscal 1985 than they were allotted in President Reagan's fiscal 1984 budget.

This "general guidance" document gives them no target figures, but indicates the administration plans to remain faithful to its old budget levels. The fiscal 1985 budget will be the last administration spending plan proposed before the 1984 elections. If anything, the document says, it is likely that further reductions in personnel and discretionary spending ceilings will be proposed.

Discretionary funds--which do not include the huge entitlement programs such as Social Security--comprised roughly 15 percent of the government's outlays in fiscal 1982. ANYONE OUT THERE? OR IN THERE? . . . While doing wonders for the art of stuffing Washington policy-makers' mailboxes, word-processors and Xerox machines that mass-produce protest letters have a way of making outrage seem freeze-dried. Witness the 27 identical letters that New Jersey pharmacists sent the Vice Presidential Task Force on Regulatory Relief, protesting the now-defunct proposal to include informational flyers with prescription drugs.

Regulatory agencies seldom respond to individual comments, but Vice President Bush has instructed all of his subordinates to respond to mail within 48 hours. The task force, however, has its own word-processor, too: the pharmacists received 27 identical responses from vice presidential counsel C. Boyden Gray.