SUPPORTERS OF immigration reform legislation were stunned last week to read press accounts of a draft report of the Council of Economic Advisers. The draft contained passages critical of the immigration bill passed by the Senate in September and now pending in the House. Specifically, the report was said to attack, on economic grounds, a key provision of the bill that imposes sanctions on employers who hire undocumented workers. A public statement of this kind by the council would have been extremely embarrassing to the administration, which has supported reform legislation through three congresses.

Within hours, the White House responded to the press reports, denying that the material in question was still in the draft report. Some of it, in fact, had been taken out 10 days before, according to press spokesman Larry Speakes. The administration's position on the immigration bill was reiterated and the CEA report amended. It now contains a declaration that the economic benefits to employers who hire illegal aliens do not justify breaking the law.

That principle seems obvious. The original draft, on the contrary, was ill conceived. It contended that using illegal labor was efficient because it lowered the cost of production and therefore contributed to economic expansion. The document also stated that requiring employers to check the immigration status of prospective employees would cost between $1.6 billion and $2.6 billion a year. That figure appears to have been pulled out of the air, as does the allegation that illegal aliens do not take jobs from Americans. The bill's sponsors have gone to great pains to meet employer objections to earlier record-keeping provisions, and, in the bill passed by the Senate, records are not even required. But employers who do check passports, birth certificates or driver's licenses have an affirmative defense to demonstrate compliance with the law.

It is undoubtedly true that an employer can save money by hiring illegal aliens. Because of their vulnerable status, they often work for very low wages, and they enjoy few fringe benefits. But this exploitation is a matter of national embarrassment, not a sign of economic wizardry. Producers could also save money by employing children, ignoring health, safety and environmental regulations and forcing everyone to work a 12-hour day. The Simpson- Rodino-Mazzoli bill is not designed to lower the costs of production but to enforce valid, reasonable immigration laws, and in so doing to protect the interests of those legally working in this country. The White House was right to reaffirm the administration's support for these objectives and this bill.