WHAT THE HOUSE should do now with the balanced-budget amendment to the debt-ceiling bill is what the world's greatest deliberative body did not do: take some time. The amendment has gone to conference, but committees can still hold hearings and the Democrats can work out a party position. It is still a little hard to know what to make of this legislation. On one level, it is all ploy; here are serious men and women gravely creating a kind of robot to do in their names in the future what they have all the power and supposed will in the world to do for themselves right now. But fiscal R2D2 would be a powerful creature if they ever switched it on. The amendment's implications need to be better understood and its fuzzy sections clarified. The Democrats may be able to do themselves and the public both some good.

There are three main arguments against the legislation. The first is that there is no need and could even be some harm in taking the budget all the way to balance as the amendment would ultimately do -- that taking too much money out of the public sector could have some unwanted distributional effects and that, if the current expansion gives way to recession as it likely will in the next year or two, deficit-reduction could be just the wrong medicine.

It could, of course -- but does anyone really want to argue that, in a world of $200 billion deficits, fiscal policy is not stimulative enough? There are two great instruments for managing the economy, fiscal policy and monetary policy -- taxes, spending and the deficit, on the one hand, ease of credit and interest rates, on the other. President Reagan, for all his reputation as a budget-cutter, has been an unregenerate hot-rodder on the fiscal side since taking office. The deficits, born of his tax cuts and defense buildup, are residue and proof of that. The Federal Reserve Board, which controls monetary policy, has felt compelled to respond by standing on the brakes. That is why interest rates are still so high, and one reason for the overvaluation of the dollar. If fiscal policy were eased, so could monetary policy be. The Fed could help fend off recession.

Imagine a world in which long-term interest rates were back around 5 or 6 percent and U.S. products were regaining their competitiveness in world markets. The real macroeconomic risks lie with present policy. If the economy falters Congress ought to be able to adjust, but the problem right now is all in the opposite direction. In the Senate the amendment was carefully revised to make it unlikely that any serious cutting would have to occur this year, or before next year's elections. That was the wrong way to go.

There is also a constitutional argument against the amendment -- that it would cede too much power over spending to the president, since if he and Congress failed to hit the deficit target in any year, he would be empowered and, in fact, required to cut spending in certain ways to stay on track. Sponsors dispute this on grounds the legislation stipulates how spending would be cut and the president could not deviate from congressional priorities; they say his function would be ministerial. The amendment was tightened on the Senate floor in an effort to make sure of this.

The real argument is the third one, over the nature of spending cuts required. That has been the issue between the president and his opponents all along; he wants the deficit brought down by cuts in domestic spending programs, they want the burden spread to defense and taxes. The amendment tries to ensure such a spread by taking hostages. In its original form it would have required him, if he and Congress failed to hit their deficit target in any year, to make cuts in Social Security and defense as well as the rest of the budget. The idea was that he would probably finally agree to a tax increase rather than do this; at least he would have to choose. The Senate then lost its nerve and exempted Social Security. Meanwhile, the president, in embracing the amendment, has never acknowledged how it might affect defense, the only hostage left. We would feel a lot more comfortable if all sides agreed how the amendment might affect the defense accounts. The House needs to elicit this.

The other great area of uncertainty involves the leading programs for the poor -- Medicaid and food stamps, the two largest, and Aid to Families with Dependent Children, the largest in which aid is given in cash. Whether and under what terms these might be subject to cuts is still not clear. Everyone understands the politics of exempting Social Security from the amendment. But it is just plain wrong to set aside Social Security benefits, which go in important part to the middle class, while cutting benefits for the poor -- and everyone understands that too. The House has a lot of tidying-up to do.