CONGRESS DIDN'T adopt its budget targets last year until Aug. 1. It was then supposed to pass a giant reconciliation bill gearing down spending all across the government. By the time the two houses did so and their conferees sorted matters out, it was mid-December and adjournment time. By congressional estimate the final bill would have taken $74 billion off the deficits of the next three years combined, but the House and the Senate could not agree on a provision for financing the Superfund and went home without passing it.

Now the bill has reappeared in wizened form. It would cut the three-year deficit by only about $18 billion (and the administration says less than that). Yet Congress still can't pass it. The House and the Senate are tiffing with the bill, shipping it petulantly back and forth in disagreement in a parody of the legislative process for which they do not even seem to have the grace to be ashamed.

Even this fragment of the old bill ranges usefully across the government. It would rescue the government's pension benefit insurance program from what amounts to bankruptcy; revise admissions policies at Veterans Administration hospitals to base them, for the first time, partly on ability to pay; and both bail out and rationalize the tobacco price-support program. It would tidy up the rules by which Medicare reimburses hospitals and doctors.

The administration and the Senate have refused to go along with a House provision requiring states to extend Aid to Families with Dependent Children to the unemployed. That is one of the reasons the House sent the bill back to the Senate yesterday, still in disagreement. The House proposal may well be a good idea, but it has not been much debated in Congress and should not be allowed to kill this bill.

Another issue in disagreement is a bit of print in the Senate version that amounts to a special Medicare reimbursement rate for hospitals in Oregon. It was put there by Senate Finance Committee Chairman Bob Packwood, who is of course from Oregon, in what he must regard as the normal run of service to constituents. But it is said to be the first time a reimbursement rule has been bent out of shape this flagrantly. The Senate should see it for what it is, and excise it.

Then the houses should agree; there is a year's worth of work in this bill, even now. For the future, the leaders must also reconsider their new habit of legislating almost entirely by mega-bill. There are reasons for using such bills on occasion, but the process has gone too far. Congress should not confine or demean itself this way.