TWO FAMILIAR PHRASES, "congressional intent" and "runaway bureaucracy," are likely to get quite a workout in the House-Senate conference on the housing act that starts this week. On the prickliest issues, the House position is blunt. It runs roughly as follows: 1) Congress has given local governments great flexibility in using community-development grants; 2) Congress has set fairly modest requirements for subsidized housing as a condition for those grants; 3) the Department of Housing and Urban Development has tried to rewrite this law and others to make local governments do much more for the poor; and 4) therefore HUD has to be brought to heel by making the law crystal clear and giving Congress a veto over the agency's future rules.

The prevailing view in the Senate is different. It holds - again, roughly - that: 1) the community-development law should emphasize projects for lower-income people and areas; 2) suburbs should not be allowed to get grants and evade their housing obligations; 3) HUD hasn't stretched the law too far; and 4) the House amendments should be shelved.

Obviously this isn't just a quibble over the parsing of a law. It's a basic dispute about the uses of millions of dollars by thousands of local governments. Because the two houses did not settle their arguments in 1974, the law they wrote is imprecise. HUD has exploited that imprecision by demanding even more of communities than most of the Senate probably had in mind. And as HUD has cracked down on suburbs with exclusionary housing policies, and cities that use their grants mostly to benefit the middle class, local officials have appealed to the House for "clarifications" that would get them off the hook.

The law does need to be clarified - but not in the manner favored by the House.It wants to give equal weight to benefiting lower-income people, preventing or eliminating slums and blight, and meeting other urgent community needs. That covers almost anything, and destroys much of the rationale for keeping this program distinct from revenue sharing.

The Senate, we think, has a better aim. The grants ought to be used mainly to aid people who most need help. This does raise some perennial problems, though. One is how to enforce a general priority without getting snarled in outlandish statistical tests of neediness and blightedness and such. Besides, some flexibility is politically helpful in persuading suburbs to meet more of their regions' housing needs. Carrots are more effective when they can be spread around.

The most important point is that the conferees should make the tough decisions they have ducked till now. Throwing the problems back to HUD, and then disapproving the agency's approach, will just compound the wrangling. Instead of brandishing legislative vetoes, Congress should give HUD - and the nation's communities - clearer legislation with which to work.