When House Speaker Tip O'Neill retires at the end of the year after a record decade in that powerful post, his greatest legacy may be unintended; on his watch the House has been surrendering its constitutional and traditional powers of originating fiscal legislation.

Article 1, Section 7, of the Constitution provides: "All bills for raising revenue shall originate in the House of Representatives. . . ." While there is no similar constitutional provision as to appropriation bills, traditionally those too have originated in the House.

The Federalist Papers do not explicitly explain the constitutional decision, but it is not hard to divine from them the reason. The Continental Congress did not have the authority to write tax laws under the Articles of Confederation; all it could do under Article VIII was levy charges on the state legislatures. Thus in 1787 a controversial feature of the new Consititution was the granting of taxing power to the federal government; Hamilton, Jay and Madison devote seven of their Federalist Papers to it.

Small wonder then that the power to initiate such legislation was granted to the legislative house whose members were under "the restraint of frequent elections . . . They will be compelled to anticipate the moment when their power is to crease, when their exercise of it is to be reviewed, and when they must descend to the level from which they were raised; there forever to remain unless the faithful discharge of their trust shall have established their title to a renewal of it."

Despite the constitutional provision and the long tradition as to other budget matters in favor of having the House initiate legislation, the speaker is permitting the Senate to take the lead this year on the Budget Resolution, as he did on the 1982 tax bill. With those new precedents, it will be difficult for the House to recapture its historic role. Why such a major capitulation? Politics, my dear fellow.

In 1982 the nation faced severe deficits arising from a recession of a severity unanticipated by the administration and the Congressional Budget Committee and from a surge in defense spending. The speaker apparently decided that his party should avoid the political negatives involved in producing a revenue bill. He sat still while Sen. Bob Dole, then chairman of the Senate Finance committee, initiated a new tax bill (tacked onto an obscure tariff measure). At a House-Senate conference, the House conferees had no tax measure of their own, and so the result was a revenue bill based on the Senate action.

Some House members sued to have the 1982 tax bill declared unconstitutional by reason of the House's failure to originate the measure, but the federal courts have been reluctant to get involved in intramural legislative squabbles and rejected the appeal.

Although the House's "right" to originate other fiscal legislation is traditional rather than constitutional, this also is being frittered away. The Budget Resolution provided for in the 1974 Budget and Impoundment Control Act determines the amount of taxes to be levied, and the total amount in appropriations that the Appropriations Committee may (without special leave) bring to the floor of the House. Compliance with the spirit of the constitutional requirements as to taxes, and the tradition as to other fiscal matters, would call for the House to initiate the Budget Resolution.

While the House Appropriations Committee has continued the tradition of turning out its bills before its Senate counterpart, this year Speaker O'Neill and his Democratic colleagues are refusing to offer the House a budget proposal. Thus we face a situation where the Senate Budget Committee has produced a bipartisan Budget Resolution, but the House lies indolent. Why? Apparently sensitized by the lack of a rousing response to Walter Mondale's proposal for a tax increase, House Democrats want the Senate Republicans to assume responsibility for such a proposal. Any office holder may sympathize with the desire to avoid unpopular actions, but surrendering the House's constitutional and traditional prerogatives is far too high a price to pay. One would hope that before he leaves, Speaker O'Neill will reverse course and leave the House as strong as when he entered.