The Department of Health, Education and Welfare began its two-day 25th-birthday celebration yesterday in an appropriately tumultuous style. If you stood at the right spot in front of the Hubert H. Humphrey Building, sometimes you could hear the combined noise of a jazz group on your left above the muted murmur of midday traffic on Independence Avenue.

Schizophrenic stereo - an apt sound for the massive bureaucracy that consumes 36 percent of the federal budget (asking for $185 billion in President Carter's January budget message) and benignly oversees most of the serious problems in our national life, from remedial reading to Social Security.

There was wall-to-wall music outside the Humphrey Building all day yesterday, as well as a sort of 12-ring circus in the building's lobby and a birthday part at midday with Big Bird leading the crowd (estimated at 600) in "Happy birthday, HEW? Happy birthday to you."

A banner over the building's main entrance proclaimed that the Department of Health. Education and Welfare was celebrating "25 Years for People Helping People," and a more flamboyant one inside (a Corita original) announced the goal of "Expanding beyond what we know we can be" which is certainly one of the things HEW has done in its 25 years of existence.

In the opening ceremonies, HEW Secretary Joseph Caliafino observed that the organization's annual budget "has increased 26-fold in 25 years," and cited corresponding though less spectacular figures on the increase of life expectancy, the decline of infant mortality, and the growth of equal opportunity for black college students. The next step, he said, will be a "historic effort to increase efficiency . . . we must be as wise and effective as we are caring."

He suggested that his agency was really "the department of the people" and that the closeness of its work to our most human concerns may be the reason why it has been so controversial."

"This department was born in controversy, has lived amid controversy, and it will probably celebrate its 50th anniversary in the midst of controversy," he said, not sounding the least bit unhappy about the prospect.

Current controversies range from the tempest in an ashtray over Califano's anti-smoking campaign to a serious effort to take the E (for Education) out of HEW.

HEW celebrated its 25th anniversary amid a carnival atmosphere, with folksingers and dancers, all kinds of popular music and refreshment stands scattered around the outside of the building selling hot dogs, hamburgers, soft drinks and popcorn as well as fresh fruit and more substantial sandwiches. These stands were the object of the only controversy visible during the entire festive day.

A demonstrator who identified himself only as "Sidney Cigarette" paraded up and down during the outdoor opening ceremonies in a cigarette costume - a white cardboard cylinder that came down to his waist and extended five or six feet above his head, with openings cut into it for eyes, nose and mouth.

Slogans were inscribed on the giant cigarette, including one about Lucky Strikes that might be libelous if reprinted and another that merely maligns a public servant: "Califano Piddles while America Smokes," with a skull and crossbones to illustrate the message.

Accompanying the cigarette man was "Tony the Tiger," a man in tiger suit protesting the tolerance of junk food by HEW. "There's some good food here," said Sidney Cigarette, "but they're also selling hot dogs and soda pop. For an agency supposedly devoted to health, that's absurd." Tony didn't say anything; he just growled, but both demonstrators were handing out a leaflet charging HEW with "mendacious incompentence" because it allows Americans to eat, drink and smoke what they want. "What's good for the Death Lobby is good for America!" said the leaflet.

In the building's lobby, a circus atmosphere was maintained with bright orange-and-white squares of canvas spread tent-style near the ceiling, an abundance of gas balloons and a lot of bustling activity, but the content of the various booths was more like what you would expect at a doctors' or teachers' convention.

Star attractions in the lobby included a computer that would tell you things about Social Security, another one on health risks that kept telling people to stop smoking, a telephone for deaf people with typewriter keyboard and video display terminal and a machine that transforms printed words into sounds for blind people.

Long lines waited for a printed-out interview with "SAM - The Talking Computer from Social Security" which conveyed slightly dismaying bits of personal information ("You are exactly 17,954 days old . . . You were born on a Wednesday . . . There are 8,831 people in my file named McLellan") as well as slogans: "When you think of the future, think of Social Security."

Considerably more spectacular was the Kurzweil Reading Machine, which reads typed or printed matter in the kind of guttural monotone you would expect a computer to speak. It can recognize more than 200 typefaces but cannot read handwriting, and it speaks with what most observers called a sort of Swedish accent: "Mary had a little lamb" coming out with sounds more like "leetle lemb."

Elsewhere, browsers could check out problems with their eyes, hearts or lungs, peek at a newborn family of white mice, watch a glassblower making laboratory equipment for NIH or sit in on students in open classrooms.

"Just the kind of show you'd expect from the Department of Everything Else," said one skeptical partygoer. Others wondered about the cost of the celebration and several (in spite of Sidney Cigarette) citicized Califano's current anti-tobacco campaign. "We'll have to smoke him out on this issue," said a blind spectator who was listening to the reading machine going through the Preamble to the Constitution.

A spokesman for HEW said that the whole two-day party cost only $15,000, mostly for printing, chair rentals and transportation, coming mainly out of the Office of Public Affairs budget and contingency funds. This is not bad for an organisation whose annual budget allows it to spend an average of $500 million per day.

At the back of the lobby is a display devoted to Hubert Humphrey, for whom the building is named, with a film showing constantly on a video screen, a display of national magazines that feature Humphrey on their covers and a long-ago copy of a Minnesota pharmacists' magazine whose cover shows young Minnesota pharmacist and senator-elect Hubert Humphrey.

The Humphrey memorial section includes a very life-like replica of an old-fashioned drug store, with a colorful display of patent medicines - including, on the top shelf in a glass case, three bottles of something called "Kennedy's Laxative Cough Syrup."

All of the exhibits attracted goodsized crowds except, curiously, a neat but rather forlorn-looking one by the National Institute on Aging. People flocked to pick up leaflets with a schematic drawing of the human eye, and to watch a playlet on communicating without words given by a troupe from Gallaudet, to hear a folksinger outside having trouble with his microphone. But most of the children, at least, thought the day's highlight came at lunchtime when Big Bird came on the scene to cut the HEW birthday cake.

Before this media superstar came on, in the only costume of the day more spectacular than Sidney Cigarette's, Califano spent a couple of minutes joking with the children. "Big Bird is supposed to be here," he said. "Can anybody see him?Where can be be?"

"He's in a corner somewhere having a cigarette," said a voice from the crowd.

He finally appeared, holding seven gas balloons which he promptly lost, wistfully watching them fly away.

Then he sang the birthday song and cut the cake, which was actually three cakes shaped to spell "HEW."

They were big cakes, but everybody wanted a piece and there wasn't enough to go around.