Adminstration officials insist that President Carter still has not decided whether to put a mandatory lid on 1978 federal-military pay increases, or allow full catch-up-with-industry raises in October.

But economic and policy aides have recommended that he put a "cap" of between 5 percent and 5.5 percent on the boosts as part of his program of voluntary wage-price restraints for the private sector.

If he does hold down the raise - and all signs indicate he will - administration sources believe it will help him politically, even if it does cost him AFL-CIO support for his plans to "reform" the bureaucracy.

The feeling is that the reform proposals have progressed in Congress to a point where federal unions that elect to oppose them would become victims of a backlash.

If Carter does decide to "cap" federal salaries, the burden would be on Congress to overturn that decision and order higher raises. The problem for Congress is that members will be getting whatever raises rank-and-file government workers get.

They would have to go on record favoring higher pay themselves only about a month before congressional elections. All member of the House, and one-third of the senators, occupy seats up for reelection this year.

Wednesday's session between the administration and the Federal Employes Pay Council was bitter. Barry Bosworth of the White House Council on Wage and Price Stability argued that federal workers must take smaller raises this year to kick off the anti-inflation program.

Bosworth's data on federal wages was challenged by union leaders. They said it was wrong - either by accident or design.

Richard Galleher, research director for AFL-CIO's Public Employees Department, led the fight against any mandatory federal pay limit.

Union leaders say it is "reprehensible" for the White House even to consider mandatory controls for federal workers while doing nothing to stop the wage-price in industry. (The president is expected to make a major policy statement outlining his anti-inflation program soon.)

Vincent Connery, president of the National Treasury Employes Union, accused Carter officials of carrying on a "nation-wide campaign defaming federal workers" as overpaid, under-worked "bloated bureaucrats". The prospect of mandatory salary controls for them means, Connery said, that civil servants are again being asked to "mount the scaffold" alone.

Dual Compensation: Some military retirees working as federal civilian are bitter over a line here yesterday which said they got pay and pension increases worth 16.1 percent in 1977. The item came from a new House report (No. 95-14) outlining the impact of military retirees in government.

Although the column pointed out that two of the 1977 raises military retirees got were on pensions, and one on civilian pay, several callers said it created the erroneous impression that they got a 16.1 percent raise. For the record: the retirees got two pension increases totaling 9.1 percent, and a civilian pay raise of 7 percent.

Reform, or Hatch Act: Several members of the Senate Governmental Affairs Committee told administration witnesses yesterday they may have to decide whether they want quick action either on political or personnel reforms of the bureaucracy.

At the first Senate hearing on the president's civil service reform plan, key members said Hatch Act changes might have to take a back seat to the government streamlining the president wants. The House-passed bill to allow federal workers to get into partisan politics has been awaiting a champion to move it out of committee.

Administration witnesses argues that the Hatch Act changes and civil service reform are unrelated. But under pressure from Sens. Charles Percy (R-III.) and Charles Mathias (R-Md.) they hinted that, if forced to give a priority rating, it would go to the civil service personnel changes, leaving Hatch Act action for a later date.