THE COMPETITION between the budget and the administration's tax reform bill is tightening. First President Reagan was going to launch the tax bill at the start of this week. Then he postponed it a week. The administration has decided not to make the bill public until after the House commits itself to a budget resolution. It's an intricate tactic, the purpose of which is to diminish any threat of a tax increase this year.

As the administration has organized the tax issue this year, it has given Congress a choice between tax reform and a tax increase. Tax reform and simplification is a cause cherished by a great many people of both parties in Congress, while a tax increase is no more popular than it ever was. As long as the choice lies between reform and a tax increase, reform will win.

But if, in the throes of passing a budget resolution, the House should decide that the real choice is between a tax increase and further cuts in social spending, the tax increase might well seem the less undesirable of the two. The tax bill, according to all the hints and leaks that the administration has been emitting, will be an interesting mixture of very good and not-so-good changes. If the tax reformers in Congress were to see the bill and find it inadequate, they might decide that there was no point in sacrificing their other priorities to it. If they abandoned the reform bill, they might then be tempted to swing to a tax increase in the struggle to reduce the budget deficit. Since the president is adamantly opposed to any increase in taxes, he wants to keep the actual text of the tax bill behind the veil until the House is through the budget votes.

Even if the administration sticks to its present schedule for the tax bill, it will be starting work very late in the legislative year. Whileax cuts can be passed quickly, it is rare for any other kind of tax legislation to be enacted in a period as short as the seven months that will be left in this year. The Highway Revenue Act of 1982 was passed more rapidly, but the only other exception to the rule in the past generation was the excess profits tax enacted during the Korean War. This year's tax reform bill will require several months of hearings and is not likely to reach the floor of either house until well into the autumn. The historical record suggests a pretty substantial possibility that it will still be pending when Congress takes up the 1987 budget next winter.

That would be a smart tactic on the part of the administration in its continuing campaign against taxes. But it's terrible policy for the country. Neither this administration nor its successors will be able to get the budget deficit under control without higher taxes. Procrastination isn't going to help. Eventuall Congress is going to have to take up legislation to pay the government's mounting bills. The longer it delays, the higher those bills will run.