In dealing with the Soviet Union, the Reagan administration still fails to see the difference between tough-minded policy and hardline rhetoric. Here enters ''Project Democracy'' for which Congress has been asked to allocate $85 million. The project received an enthusiastic endorsement from Secretary of State George Shultz. Testifying before a House subcommittee, the secretary said that the program was ''so clearly'' in the US interest that he was compelled to ask, ''Why hasn't this been done before?'' According to Mr. Shultz, a satisfactory explanation was not provided.
Too bad. There is an easy answer: Project Democracy in its current form can do more harm than good. At best, it has the potential of discrediting a number of perfectly sensible efforts to communicate American perspectives to the outside world. At worst, it can embarrass the United States and give ammunition to enemies of freedom.
There is simultaneously less and more to Project Democracy than meets the eye. On one hand, the bulk of money requested is for scholarly exchanges, new research institutes, and publications specializing in the promotion of democratic values and practices. An inordinate degree of optimism is required to believe that these ventures are capable of weakening world authoritarians. On the other hand, Shultz's promise to help proponents of democracy create ''an international network'' to protect them ''against their adversaries'' is bound to create an unnecessary controversy. Specific proposals which constitute Project Democracy, many innocent and useful, will be judged not on their own merit but in the context of a propaganda campaign which quite a few target governments will find distasteful and even menacing.
Consider, for instance, the likely fate of a plan to expand international visitor exchanges with Eastern Europe. Great-er communication with East Europeans, including East European elites, should indeed be a foreign policy priority for the US. One may hope that more intense contacts with America can encourage local political classes to feel less isolated from the West, and, consequently, less dependent upon the Soviet Union. The trouble is that exchanges with official East Europeans are an item in the same Project Democracy budget as a suggested new Center for the Study of the Soviet Union which - if the administration has its way - will be staffed with recent emigres from Russia.
Surely the Kremlin will claim that the emigre center is a subversive organization. And equally surely, Yuri Andropov and his colleagues will warn East European leaders to have nothing to do with Project Democracy.
The Politburo will also argue that association of the emigre center with Project Democracy gives proof that former Soviet citizens are used as pawns in psychological warfare against Russia. Why should the Kremlin help enemies of the Soviet regime by continuing the issuance of exit visas to its subjects? And there is more. Emigre scholars are expected to write for and lecture to US audiences. But this is directly in contradiction with the charter of the United States Information Agency (USIA). The USIA, which will administer Project Democracy, is required to communicate US views overseas. Sen. Charles Mathias Jr. (R) of Maryland, was right on the mark when he complained during Senate hearings that Project Democracy would put the USIA in a position of directing ''public affairs'' in the US.
In diplomacy - even in public diplomacy - discretion is a virtue. It would be ironic if a project advertised as a contribution to global democracy ended up helping Moscow sabotage East European dialogue with America and justifying a Soviet crackdown on emigration.
Good news. Secretary Shultz has just appointed several distinguished authorities on East-West relations as members of the newly created Policy Planning Council. His new advisers - Jeremy Azrael, Robert Osgood, and Peter Rodman - are no softies. Rodman, for example, is a regular contributor to such neoconservative publications as Commentary and the American Spectator. However, all are pragmatic and do not advocate making hawkish noises just for the sake of enjoying the sound. They know that policies are judged not by intentions but by results. And it is to be hoped they would explain to Shultz the dangers of Project Democracy.
But will the secretary of state listen? More important, would he be willing to support their views with President Reagan? The President has recently brought one of Project Democracy's principal architects, John Lenczowski, age 32, to the White House to replace Harvard professor Richard Pipes as a senior Soviet adviser. Lenczowski is bright, personable, and decent. He is also a true believer. In comparison, Pipes looks like a seasoned moderate. Lenczowski has no experience in negotiating with the Soviets. His background is exclusively in masterminding an ideological crusade against them.
Lenczowski, who holds a PhD in Soviet studies, has never visited the Soviet Union. So what? - Pipes asks - defending his young successor. Theodor Mommzen, after all, never visited ancient Rome. And this did not prevent him from writing a first-rate historical account. But, of course, it would be difficult to visit ancient Rome in the 19th century.
Lenczowski may still go to Russia. And even his critics admit that he is a quick study. The problem is not with him and not with another recent controversial appointee, Ken-neth Adelman. The problem is with a mindset in and around the Oval Office which confuses polemics with substantive policy. And unless Secretary Shultz is willing to try to influence this mindset when possible and is prepared to challenge it when necessary, no advice from experts will matter much.