Again Congress is grappling with the Nicaraguan contras, whom it last left (in April) without American support. The choice -- in the House, where it counts -- is between a Democratic plan articulated by Rep. Michael Barnes and a Republican plan offered by Rep. Robert Michel. The Barnes plan takes the American finger off the trigger of the insurgency: it repudiates the Reagan resort to force, bars military aid and makes relief available to contras only as international wards outside Nicaragua. The Michel plan keeps the American finger on the trigger: it offers "humanitarian" aid -- a euphemism for logistical aid to a force whose military needs are met by others -- to contras operating inside Nicaragua. Both plans undertake to facilitate diplomacy, encourage a Nicaraguan political dialogue and induce a purge of the contras' Somoza and criminal elements.

The Michel plan appears to be a moderate Option B. It keeps faith with Nicaragua's good democrats without directly refueling a controversial military intervention. But it is one-sided on the wrong side. It rests explicitly on the threat of renewing American support for an intervention that four years of experience have discredited.

The Sandinistas have used the intervention to rally considerable Nicaraguan opinion and substantial international opinion to an otherwise flagging cause. The contras have inflicted some heavy damage in the countryside but have yet to apply anything near the pressure that would compel the regime to "say uncle" -- President Reagan's stated goal. The likeliest danger now is a sharpening of Sandinista border clashes with Honduras and Costa Rica. U.S. involvement, to protect these clients against reprisals brought on by their support of American policy, is a growing risk.

Given their other means, the Barnes plan might not force many insurgents to quit Nicaragua. Those who did leave, however, could stay constituted as a military force while they were on relief -- like Afghans in Pakistan. The Sandinistas would know this, and understand it. The Sandinistas also understand a second Barnes lever: his plan carries only until Oct. 1 and then promises the president an expedited hearing on a new proposal. The idea is to provide a space for bargaining, and some incentives for bargaining.

The administration's unilateral embargo of Nicaragua let Managua play David to the American Goliath. Latins, Soviets and NATO allies are filling in. We still feel, however, that the embargo was a useful expression of the American commitment to make sure that the Sandinistas respect their neighbors, loosen their worrisome ties to Havana and Moscow and move toward pluralism. In any event, a stick, once applied, becomes a potential carrot. The coming months must be used for a diplomatic effort.

The immediate need is to head off a widening war at Nicaragua's borders. This can best be done by imposing the border controls drafted by Mexico and its partners. Nicaragua has long been ready. Honduras and Costa Rica have held up, at American bidding, largely because mutual respect for borders would cut off the contras. This is the moment to end this dangerous game. Once borders are formally sealed, the question of levels of arms, advisers and maneuvers becomes more manageable.

And what of Nicaragua's good democrats? Intervention has not helped them and shows poor prospects. For what it is worth, the Barnes plan does implicitly keep that option available. Within Nicaragua, enough pluralism still remains to spark a resurgence. The softening of war hysteria could help, especially if it permitted Nicaragua's Latin neighbors and other foreign democrats the opening in Managua that has largely been denied them while the Sandinistas were preoccupied with survival. The Barnes approach does not offer everything we would like, but it offers more than the Michel plan does.