December 15, 1985

IT was not a good week for President Reagan on Capitol Hill. As the frenzy to end the 1985 session accelerated, Republicans ambushed a package of tax revisions that Mr. Reagan considers the centerpiece of his domestic program and prevented it from reaching the House floor for debate. There was still some chance that enough Republicans would switch their votes to revive the measure this week, before Congress recesses for the year, but that would not erase the stark image of a President embarrassed by members of his own party. Then Mr. Reagan signed into law a bill mandating that Congress balance the budget in annual steps over the next five years. The President had originally embraced the concept as a way of forcing Capitol Hill to cut domestic spending. But now White House officials acknowledge that the law could also wind up forcing the President to accept sharp slices in military spending, or a tax increase, or both. Mr. Reagan rejected advice from some of these officials to veto the bill, but he signed it in private, with no ceremony or fanfare.

''What has always troubled me about 'King Lear' is that Shakespeare gives his characters no past. We are plunged directly into the agonies of their present dilemmas without knowing how they came to this point.'' Unexpected criticism of the Bard from an unlikely source, but the thought takes on greater meaning as Akira Kurosawa pursues it in discussing ''Ran,'' his newest film, which has been called an adaptation of ''King Lear.'' ''How did Lear acquire the power that, as an old man, he abuses with such disastrous effects? Without knowing his past, I've never really understood the ferocity of his daughters' response to Lear's feeble attempts to shed his royal power. In 'Ran' I've tried to give Lear a history. I try to make clear that his power must rest upon a lifetime of bloodthirsty savagery. Forced to confront the consequences of his misdeeds, he is driven mad. But only by confronting his evil head on can he transcend it and begin to struggle again toward virtue.''

More than two and a half years after President Reagan broached the idea of a space-based defense, many Administration experts and critics alike remain uncertain about the consequences of such a defense for nuclear strategy and arms control. Yet almost all in the Government are going along with the program and, as a result, it has moved forward significantly in the past six months. Indeed, the prevailing view now is that it will become harder and harder to turn back - even though Administration officials and legislators acknowledge that there is deep confusion about the purposes and consequences of ''Star Wars,'' as the proposed system is popularly known. Despite the gathering momentum, key Administration officials say the program has not reached the point of no return. They say they are waiting for the opportunity to get the President to authorize measures that will take it even further before he leaves office in 1989, so his successor will be more or less compelled to forge ahead.

The Reagan Administration leaned on Israel last week to satisfy United States demands for evidence in the case of Jonathan Jay Pollard, an American Navy analyst accused of spying for Israel. American investigators met in Israel with Foreign Ministry and intelligence officials.

The banners had been hung in the Fort Campbell, Ky., gym. The base band was prepared to play. But last week's welcome for members of the 101st Airborne Division returning from a five-month peacekeeping stint in the Middle East turned into a wake. A chartered jetliner carrying the 248 soldiers and a crew of eight crashed in the Newfoundland woods Thursday, killing everyone aboard. It was the worst crash in Canadian history and brought the aviation death toll in 1985 to 1,948, the worst year on record.