Parren J. Mitchell was about 12 years old when he sat uneasily with the rest of his family in his Baltimore home, waiting for his brother Clarence to come home for dinner. Suddenly Clarence burst into the house, violently ill. He had just witnessed a lynching.

It was, said Rep. Parren Mitchell (D-Md.), 63, an upsetting political christening for the harsh world of racism, a world he refused to accept.

Soon the youth joined picket lines, protesting segregated stores in Baltimore. By 1950, Parren Mitchell was in the courts, suing the University of Maryland for admittance as its first black student on its College Park campus. And 13 years later, as executive secretary of the Maryland Interracial Commission, he was battling a Prince George's County restaurant that refused to serve blacks.

Capping a career that took him from jobs as a probation officer to heading Baltimore's antipoverty program, Mitchell won election in 1970 to the House of Representatives by just 38 votes. Dismissed by some colleagues as too liberal and considered too blunt by others, he nevertheless developed a reputation among most House members as a passionate man who fought for the poor and minorities, a man who never lost his sense of outrage.

That outrage has persuaded him to retire from Congress at the end of his term in 1987, Mitchell said, because Congress "has lost its sense of compassion" and is slipping backward, chipping away at the hard-won gains of the civil rights movement. It is crucial, said Mitchell, that civil rights activists shore up defenses now for the coming onslaught.

"I'm concerned about what you might call the heart of Congress," said Mitchell. "Those who are poor are generally treated with contempt. The concerns of minorities are no longer the concerns of this Congress . . . . It's a step backward."

Opposition in the Reagan administration to some affirmative action programs "has clearly emboldened people . . . by playing on the racism that's always just below the surface," he said. "I think the mood . . .is going to last another 10 or 15 years."

Mitchell says his vision for the nation's future is discouraging for a man whose family has spent the decades since the Depression involved in the civil rights struggle. But it is also an affirmation of his belief that the nation is far from colorblind. He says racism is woven into every layer of life, every region of the country, and every institution, including Congress.

"The sad thing is, I don't think I will ever be able to cleanse all the bitterness out of my system. I just don't. I can recall at every critical juncture in my life, running into just open, naked racism. Times have changed, but I feel they're slipping back again," said Mitchell.

Mitchell was born in 1922 into what was to become one of the preeminent families of the civil rights movement. His brother, Clarence M. Mitchell Jr., whom he called "my big brother hero," was director of the Washington bureau of the National Association for the Advancement of Colored People from 1950 to 1979. Clarence Mitchell, often called the 101st senator because of his influence on Capitol Hill, was a driving force behind much of the civil rights legislation of the 1960s.

Clarence Mitchell's wife, Juanita Jackson Mitchell, an attorney, was state president of the Maryland NAACP and argued many of Baltimore's landmark desegregation cases.

Clarence M. Mitchell III is a state senator who is contemplating a run for the House seat being vacated by Parren Mitchell. Michael B. Mitchell, Clarence Mitchell III's brother, is a member of the Baltimore City Council.

Parren Mitchell, who has never married, is a trim 5-foot-5, with graying hair and mustache. Friends say he is somewhat shy, often shunning the limelight. He declined to call a news conference when he decided to retire from Congress, although his 15 years in Congress made him the senior member of the Maryland House delegation. When a low-income housing coalition wanted to do something to honor him, he told them they could not afford it.

When he entered Congress, said Mitchell, he had a sense of purpose, feeling that he had come to reform the political process. "I was part of that breed that came in with some very clear-cut objectives. I was part of that movement in the country that was deeply dissatisfied with the way the political process was working, and deeply dissatisfied with our involvement in Vietnam."

Deciding that "the next phase of the civil rights struggle was the economic phase," he took seats on the Banking, Finance and Urban Affairs Committee, the Joint Economic Committee and the Small Business Committee, which he chairs.

In his early days in Congress, colleagues say, many members did not know what to expect of Mitchell, whose image as an angry militant clamoring to upset the status quo made many uncomfortable. "He has shown dimensions that some people didn't know he had, particularly his critics," said Sen. Paul S. Sarbanes (D-Md.). "I perceive Parren as firmly committed as he was in the beginning. But he's been able to exercise power and has done it in a very skillful way."

Sarbanes credits Mitchell with much of the success in the complex negotiations among the federal, state and local governments over the newly completed $750 million Fort McHenry tunnel, which completes I-95 through Baltimore.

"His rhetoric is one thing," said Rep. Roy Dyson (D-Md.). "You listen to him on the floor sometimes and, well, he's obviously committed to some political positions, and they're not necessarily mine. But his style in the private delegation meetings with members is different," low keyed with an emphasis on consensus building.

Mitchell is credited by many black members of Congress with shaping the Congressional Black Caucus into a forceful group during his tenure as chairman during the mid-1970s. He was dubbed "The Little General" because of his ability to organize his forces quickly.

"He ran a tight ship," said Rep. Charles B. Rangel (D-N.Y.). "When he was chairman, there was never frivolity. There was extremely good attendance."

There are some members of Congress, however, who say privately that Mitchell's anger, which can seethe, kept him from being part of the insider network that ran the House. Mitchell, at times, made his white colleagues uncomfortable by emphasizing, rather than playing down, the schism between whites and blacks. For instance, in 1977 Mitchell said he watched only two episodes of "Roots," the television miniseries on the black ancestors of writer Alex Haley: "I couldn't watch the rest. I was too angry . . . . If I had met any of my white friends, I would have lashed out at them from a vortex of primeval anger."

"He takes his philosophy very seriously. He doesn't change it like his socks," said Rep. Dennis E. Eckart (D-Ohio), who serves on the Small Business Committee with Mitchell. Eckart said that, as a skeptic of the small business loan program, he has been on the opposite side of that fight from Mitchell. "But he's collegial as opposed to dictatorial. He didn't break any arms. When it came time for the shoot-out, he lined up his votes, and you knew where he stood."

Other members of Congress said that Mitchell's focus on minorities and the poor gave him a too-narrow base, limiting his influence largely to these issues. Younger black members, seeking fuller and more powerful roles in the House, have sought to get involved in a wider range of issues and replace the "angry militant" image of previous generations with more of an "institutional player" image.

Mitchell points most proudly to his sponsorship of programs setting aside portions of federal contracts for minority and small business persons. The most recent legislation, passed in 1982, requires the federal government to set aside a share of the federal research budget for small businesses. Mitchell succeeded in shepherding the bill through the House, despite opposition to parts of the measure from six other House committees as well from as the major universities in the nation.

He takes great satisfaction in his work in promoting low-income housing programs and summer youth job programs, and in his opposition in Congress to the Vietnam War and to President Nixon during the Watergate crisis.

But Congress also has been a world of frustrations, said Mitchell.

In 1977, he saw his minority set-aside program under attack in Congress, after revelations that many contracts that were supposed to be set aside for minority business persons were going to blacks who were fronting for white contractors. In one congressional hearing, Mitchell angrily denounced "these white knaves and their black Judas Iscariots" for threatening the success of the program.

"I think he feels the issues very deeply, and the hurt which the people he represents are experiencing is something he feels personally, so the job is draining," said Sarbanes.

His frustrations and bitterness bubbled forth this August in an extraordinary speech before the National Association of Black Journalists. "Welcome to Baltimore. We have so much here. We have the Harborplace . . . . We have some fantastic museums. But I want you to see something else. I want you to come up to my neighborhood," said Mitchell. "There you will see all the young men and the middle-aged men, and the old men, who are out of work. Desperate, 50,000 young men with nothing to do all day long . . . . Visit my city and see its agony and its ecstasy."

Mitchell places the blame for these problems on the Reagan administration and on an acquiescent Congress. He claims that the White House pushed through a tax cut "knowing full well that it meant that there would not be sufficient revenues to sustain government efforts on behalf of the poor."

Mitchell also contended, "The Justice Department has simply sold out. It's no longer a friend to women, nor to minorities." In 1980, he started a legal defense fund for minority business persons, funded by donations from them. He said that it is still small and that he will spend much of his time after 1986 building it up.

Despite considerable problems that can be expected in trying to set up such a fund, Mitchell said he believes it can be operating in about four years, in time to rescue many minority business persons who might otherwise fail because of federal cutbacks.

Said Mitchell: "I guess I'm a mixture of a dreamer and a realist.