The Library of Congress distributes about 1 million surplus books every year to schools, libraries and public agencies around the nation. With book prices zooming, the free program is a considerable boon to those budget starved institutions.

But it is not quite the boon it might be, because members of Congress have decreed that they, too, are entitled to the free books. And Congress has established a priority system that lets its members take their pick before the books are made available to schools and libraries.

Library of Congress officials say about half the members of Congress draw regularly from the ever-changing surplus stacks, but the library refuses to reveal which ones do so, or how many books they take.

Yesterday, however, the Cleveland Plain Dealer reported that Rep. Charles J. Carney (D-Ohio), has taken more than 60,000 free books from the library over the past 2 1/2 years, including history texts, popular novels and sets of encyclopedias.

The Plain Dealer said Carny had sent some of the books to his relatives and kept thousands in his personal libraries here and in Youngstown, Ohio.

The congressman said late yesterday that the story was "overblown." He said he had taken 62,131 free books from the library - not 64,076 as the Plain Dealer reported - and had sent almost all of them to schools and libraries in Ohio.

"I go through the ones we're sending to Ohio, and if I see a couple of books I want, I take them out," Carney said. "When I've read them, I send them to the district."

Nathan R. Einhorn, an amiable, white-haired biliophile who runs the Library of Congress' Exchange and Gift Division, said Carney, who once took more than 1,000 volumes from the surplus stacks in one day, is the champions congressional recipent of the free books.

But Einhorn said that more than 250 members of Congress take advantage of the surplus arrangement, as do officials from other federal a gencies. Einhorn noted with a chuckle that he has never had an order from the White House.

The books from which Carney and the others choose are among more than 1 million volumes, some used and some duplicate copies of new titles, that the library declares "surplus" each year.

The library receives copies of every publication copyrighted in the United States, every government publication and shiploads of foreign books, takes in about 25,000 more books scholarly journals each week than it can use.

The surplus books are stored in stacks in the library's annex building, and each day during business hours eligible recipients come by to see which titles they would like to claim.

Among the regular browsers are congressional aides dispatched to find books for their employers. To assure that they will have the pick of the lot, Congress and the library have established a three-tiered priority system governing disposition.

Priority I - which gets first pick over books newly declared suplus - includes Congress and the executive agencies.

Priority II - which get to the books after they have been available to top priority takers for two weeks - includes book dealers, who must pay or trade for the books they receive.

The third priority covers schools, libraries and state and local governments.

Yesterday, the stacks for Priority I included 1977 editions of several reference books and fiction by leading authors. The stacks for Priority II seemed to include little current fiction, but did offer "Who's Who in Malaysia, 1968" and a 1958 bound volume of Motor Engineering Magazine.

Books that stay on Priority II shelves for more than four weeks are sent for pulping or recycling. "Sometimes," said Einhorn with an uncomfortable shudder, "it's even landfill."