AT THE tumultuous meeting last weekend of the National Council on the Arts -- the group that sets policy and reviews grants for the hapless National Endowment for the same -- one arts advocate argued in favor of broad content restrictions "to give Congress a sign that we don't need a hearing aid." It's an apt image for a deadlock that owes as much to communications failure and distortion as to deep-seated disagreement. That the split has come to seem intractable -- and to be written off with sighs as insoluble -- is due mostly to the prominence in the debate of two views that allow for no compromise: one that government should have no say whatever in what kind of art it funds, the other that the government should fund no art at all. The first position, the NEA's rule of thumb for many relatively successful years, seems as unlikely as its opposite to prevail in the current climate. But there is a broad and hidden middle debate possible here among those who agree distinctions can be drawn and judgments made about the appropriateness of government-funded artworks -- but who differ sharply over how and by whom.

The sentiment in Congress, which will debate the reauthorization bill this fall, is strongly for some kind of so-called content restrictions, such as the ones now in force, which bar funding for works that "may be found obscene" on a variety of grounds. Some lawmakers have said in effect that they won't face their constituents with less than such a pledge -- "No more (fill-in-the-blank) art with your money" -- especially those whose districts have been targeted by the Rev. Donald Wildmon's direct mail. The artist groups and the endowment itself, along with many of its longtime congressional supporters, are vociferous in their insistence that such broadly worded rules make responsible judgments impossible, based as they are on still undefined and perhaps legally undefinable terms like obscenity, indecency and "denigration" of certain religions or ethnic groups. (Consider, for example, the effect of replacing the term "denigrate" with "criticize" or "challenge.")

But this does not mean art must be untouched and unjudgeable. In the National Council meeting and earlier at the president's commission on the NEA, a number of thoughtful people spent time exploring the capabilities and limitations of such restrictions and possible alternatives to them. Among the notions aired: increase the role of the umbrella National Council in passing or vetoing the grants handed up by the panels; require those panels to be constituted differently from the excessively specialized, back-scratching setup that now exists, and more like those of the more tightly run and less controversial National Endowment for the Humanities; or even, simplest of all, require that the peer panels approve more grants than there is money, to force the Council to alter its current rubber-stamp stance. Such changes would be far from a whitewash; instead, they could represent genuine improvements for the endowment. The irony will be if members of Congress, already tied to content restrictions, refuse to broaden their focus to reforms of the NEA that might actually help it.