Competition for the Regan Prize is growing hotter than ever. The secretary of the Treasury, Donald T. Regan, offered a prize earlier this year to anyone who could show him any connection between high federal budget deficits and high interest rates. We had earlier thought that the Regan Prize had been won by the chairman of the Federal Reserve Board, Paul Volcker, who offered some pretty clear instruction on that point. But now the chairman of the president's Council of Economic Advisors, Martin Feldstein, has submitted a highly persuasive entry in the form of a speech to the Chamber of Commerce International Forum. Perhaps the Regan Prize should be awarded annually, like the Nobels. Mr. Feldstein is taking a commanding lead for the 1984 award.

The amusing thing about it is, of course, that Mr. Regan continues to declare adamantly that he sees no "necessary" connection between deficits and interest. That word "necessary" is a reference to the secretary's discovery that some countries--for example, West Germany--have large deficits but interest rates lower than those in this country. The explanation is that Germans save more than Americans, which helps finance their deficit, and their investors have less reason to be nervous about inflation.

Mr. Regan is merely trying to be helpful to his neighbor across the street in the White House, who --if he should run for reelection--will face a certain embarrassment regarding that budget deficit. Mr. Regan wishes to deflect the conclusions that many economists, not to mention voters, draw from the administration's budget performance.

Mr. Feldstein, in contrast, was making a serious point. He was explaining to his audience, whose interest in the subject is not entirely academic, why U.S. exports are falling down the cellar stairs. They are falling because the dollar is high; the dollar is high because interest rates are high; and interest is high because of that $200 billion-a-year deficit.

There is another serious point that Mr. Feldstein did not make explicitly, but which deserves your attention. He observed that the American current account deficit--this country's international deficit on trade, services and so forth--might well be $100 billion next year. While a federal budget deficit pushes the national economy toward growth and higher employment, the current account deficit pulls in the opposite direction--and it is getting big. In other words, it's a bad strategy simply to let the budget deficits run and to count on them to keep the economy expanding briskly through the 1984 election. Those deficits are already generating countervailing effects. But there's no Regan Prize for pointing out that unwelcome truth.