President Reagan has just submitted a request for $100 million in Defense Department funds to supply military and so-called humanitarian assistance to the Nicaraguan contras. By asking for a transfer rather than new appropriations and by requesting spending authority rather than direct military aid, he hopes to slip the request through a Congress with serious reservations about any support for the contras.

Perhaps as a ploy to lower our resolve, in recent weeks the administration has resorted to shabby and insulting scare tactics. CIA Director William Casey and the State Department's Elliott Abrams have been circulating a document describing a Nicaraguan disinformation campaign to manipulate Congress and American public opinion into opposition to the contras. Since the security folks won't share this report with the rest of us, it is easy for them to claim that those who disagree are dupes of the Marxists in Managua.

The president met with key Republican senators recently, admonishing them that the summit process would be affected by congressional action on aid to Nicaraguan rebels and the resultant Soviet "perception of our global position and internal solidarity." On this, I agree with the president. But I believe his administration is pursuing counterproductive policies which will inevitably result in a worsened superpower relationship.

In making this request, the president again claims that the purpose is to induce negotiations with the Sandinistas. Let me repeat his earlier promise to my colleague, Rep. Dave McCurdy: "My administration is determined to pursue political, not military solutions in Central America . . . and to secure democracy and lasting peace through national dialogue and regional negotiations. We do not seek the military overthrow of the Sandinista governent or to put in its place a government based on supporters of the old Somoza regime."

Again, I agree with the president and I wish I could believe in his word. Unfortunately, both he and senior administration officials have too frequently given the opposite impression. For instance, last year Congress appropriated $2 million in support of the Contadora peace process. The administration has not used one penny and and has no plans to do so before the funds expire at the end of March.

Instead, Reagan seems to see the Sandinistas as a dangerous cancer, to be cut out with bayonets. He ignores the fact that our continued intervention is the one sure way to increase communist influence in Nicaragua, to unite the Nicaraguan people in defense of their national sovereignty. Even if the current level of contra funding were continued, allowing a festering war of attrition, the cost in human lives and economic development would be immense. And any continuation of the fighting in Central America increases the likelihood that American troops would have to intervene.

Wholehearted but tough-minded support for the Contadora negotiations has always been the best way to achieve our legitimate goals in Central America. Every democracy in Latin America supports negotiations and opposes a military solution -- even those countries that share borders with Nicaragua. Oscar Arias Sanchez, president-elect of Costa Rica, insists violence is not the answer. A firm believer in democracy, Arias calls for increased developmental assistance to the region instead of contra aid, to prove that ". . . Marxism-communism is not the best system for improving the standards of living of people."

Honduras, too, has a new, democratically elected president, Jose Azcona, who has told Reagan officials that he is prepared to end U.S. military exercises if that will facilitate a peaceful settlement. Even Guatemala, now under democratic civilian rule after long military subjugation, has forcefully called for negotiations.

Conditions in Nicaragua -- martial- law rule by a more and more authoritarian Marxist government -- are deplorable, and all of us in Congress recognize that fact. At the same time, private business remains, the opposition press is active if harassed, political parties provide some forum for dissenting views, the Catholic Church continues to protest injustice, and, most important of all, the Nicaraguan government has consistently expressed its willingness to abide by a negotiated settlement. We have ample reason to doubt the Sandinistas, but we also have a chance to construct an agreement with real penalties for violations. Why not call their bluff?

Gorbachev and company will certainly be observing the president, Congress and the American people as we debate the proper national response to the events in Central America. It is imperative that we act with full confidence in democracy's robust ability to meet the Sandinista challenge.