Politicians who once wrapped themselves in the flag now wrap themselves in the Constitution. In recent weeks we have heard a great deal about how our constitutional system is supposed -- and is not supposed -- to work. We have often heard that the system is not working as it was intended. Yet, while the authors of that great American masterpiece The Federalist Papers might have been dismayed by the Iran-contra affair and its investigation, it seems clear they would not have been surprised by Congress' further encroachment on presidential responsibilities.

Those supreme realists -- Alexander Hamilton, James Madison and John Jay -- did not expect that our political leaders would necessarily be either wise or virtuous. ''If men were angels,'' Madison wrote, ''no government would be necessary.'' They knew that ''enlightened statesmen will not always be at the helm'' of the presidency and that legislators can seldom be counted on to prefer public over private interests.

They knew that politics would often grow bitter and divisive. ''Democracies have ever been the spectacle of turbulence and contention,'' Madison wrote in his most famous essay, "Federalist No. 10," ''and have in general been as short in their lives as they have been violent in their deaths.''

Still, Madison, Hamilton and Jay would not have taken lightly the current struggle between Democrats and Republicans over foreign policy. They believed the consequences of such struggles could be fatal: ''. . . instability, injustice, and confusion introduced into the public councils have, in truth, been the mortal diseases under which popular governments have everywhere perished.''

Divisions, rivalries, instability and paralysis were ills the Constitution was designed to render less dangerous. The separation of powers between states and federal government and between executive, legislative and judicial branches, and the separation of legislative power into two houses, were designed not only to protect the people against the abuse of power, but to filter interests and calm passions, rendering them less dangerous to the system.

The Federalist authors also would not have been surprised to see a committee of Congress delving in the greatest detail into the chief executive's conduct of foreign affairs, seeking to define for themselves their own constitutional mandate and that of the president. In a government like that of the United States, Madison wrote, ''the legislative department is everywhere extending the sphere of its activity and drawing all power into its impetuous vortex.''

Still, the Federalist authors might have been surprised at how little public discussion there has been concerning the dramatic extension of Congress' power, especially when that absence of discussion is compared with the outcries against ''judicial imperialism'' in the New Deal period and the ''imperial presidency'' of the Nixon era.

In foreign affairs particularly, Congress has stretched the powers of the purse and of oversight beyond recognition or reason -- claiming for itself a veto power over many details of implementation, devising action-forcing mechanisms that limit presidential authority. The War Powers Resolution adopted in 1973 (whose constraints no president has accepted) is the most sweeping example of such legislation.

But two other examples have figured in the Iran-contra affair: the congressional requirement of prior notification of covert activities and the Boland Amendment, which prohibited intelligence agencies of the government from offering assistance to the contras. These latter two are a particularly clear violation of Madison's dictum that none of the departments of government ''ought to possess, directly or indirectly, an overruling influence over the others in the administration of their respective powers.''

Hamilton was especially fearful that Congress might use ''tedious delays, continued negotiation and intrigues, contemptible compromises of the public good'' to ''embarrass the administration to destroy the energy of the government.''

It has all happened. And, as Hamilton predicted, such behavior has diminished our reputation and influence in the world.

There are two principal reasons for the absence of public discussion on the issue of congressional encroachment. First, the political complexion of the parties has influenced the debate. In the case of the ''imperial judiciary,'' a conservative court was able to block a New Deal Congress. In the case of the ''imperial president,'' that president was often able to override a more liberal Congress. But now a liberal Congress is able to hamstring a more conservative president. There is not much doubt that liberals worry more vociferously about constitutional balance when the weight is on the other side.

The second, and in many ways more interesting, reason is that the Reagan administration has not pressed the issue. Instead of challenging, either legally or politically, Congress' authority to impose the constraints at issue in the Iran-contra hearings and elsewhere, the Reagan administration has preferred simply to evade them.

This unfortunate tactic has deprived the country of a potentially useful debate and has given the Democratic majority in Congress the opportunity to treat the administration as a lawbreaker rather than as a coordinate body of government. Too bad.