To hear Sen. Alan K. Simpson (R-Wyo.) tell it, Congress is about to declare the American system of government null and void, abolish the states and establish a new political mishmash.

But as Sen. Jennings Randolph (D-W.Va.) sees it, Congress is being given a chance to put the best innovative elements of the system together, and spread wisdom and prosperity nationwide.

Somewhere in between may lie the real meaning, but for now, Congress is well on its way to buying Randolph's theory as laid out in S.835 - a bill to create a national network of regional development commissions.

The Senate Envoronment and Public Works Committee, chaired by Randolph, has approved the bill. A similar measure, though not quite as sweeping, was passed this mouth by the House Public Works and Transportation Committee.

Both measures are expected to reach floor-debate stage this summer, accompanied by raucous controversy over whether existing commissions represent boon or boondoggle.

Some legislators - notably Simpson and Sen. John H. Chafee (R-R-I.) - think the commissions, although packaged in benign labels, represent not much more than a raid on the federal government's money and power.

But when critics such as Simpson and Chafee go to the Senate floor to hear debate, they will learn - if not aware already - that they are challenging one of the most politically popular creations around.

The first of these, born in 1965, was the Appalachian Regional Commission (ARC), which has funneled more than $5 billion into depressed sections of its 13 member states. The money is federal; the spending, local.

The same year five other commissions were set up, covering hard-pressed parts of the country, and five more soon followed. Compared to the ARC their funding and activities have been tiny - a total of less than $63 million for this fiscal year.

Governors curl up warmly beside the commission idea. It means federal money for their states with few controls. Legislators like the way it pours federal dollars into home districts. Planners and consultants see the commissions as unending rivers of money for studies, surveys and reports.

Given the political popularity of the regional commissions, the Carter administration has endorsed the concept of expanding them to cover parts of every state on the mainland.

Spurred by appeals from the governors and recommendations from a White House balanced-growth conference last year, President Carter approved the proposals - with a now famous "leaked" memo denouncing them.

Carter's margin notes on a White House decision paper reflected the same kind of skepticism and concern that other critics have leveled.

"I do not think much of the commissions," he wrote. The president gave "reluctant" agreement, but added: "In general, I consider the regional commissions to be a waste of time and money. Very top-heavy under the federal and state cochairmen - a source of a few dollars for governors. Maybe it's improving - I hope so."

As governor of Georgia, Carter had first-hand experience; his home state is in the Appalachian commission. But he also recognized the political popularity of the regional bodies. In January he ordered the formation of three more.

The original idea behind the ARC and the other commissions - known as Title V commissions, since that title of the Public Works and Economic Development Act created them - was to pump special federal aid into the neediest areas.

They could be brought up to the level of general prosperity, the theory went, through this federal-state partnership that emphasized special planning to deal with special problems - regional problems that required new and different approaches.

Theoretically, when the problems were solved, the commissions could be disbanded and the regions would go it on their own.

But now the concept has changed. The pending legislation is aimed not just at depressed areas, but at parts of all the lower 48 states to help plan and guide development. The Senate bill also would set up a "regional" commission for one state - Alaska.

Even as Congress is about to buy this new approach - little serious floor opposition is expected - the criticisms of the existing commissions grow.

An audit this year by the Department of Commerce, which oversees the Title V commissions, described problems with the regional bodies and determined that most existed simply as a convenient means for divvying up federal funds.

The auditors held that the commissions were not dealing with problems on a regional basis and were not targeting their severest needs for attack.

In another report, the General Accounting Office of Congress concluded a three-year study of the Appalachian commission by saying the ARC could not account for about$1 billion in federal funds.

ARC officials strongly rejected the findings.

GAO said the commission's accounting system was so inadequate that it could not determine how all of its money had been spent or whether it had been used wisely by other federal agencies and the recipient states.

GAO conceded that the 13-state region that stretches from New York to Mississippi had made dramatic economic gains since 1965 but said few can be directly to ARC's efforts.

It said that Congress should not follow ARC's advice and move as it now appears to be doing, creating a national chain of commissions tailored on the Appalachian model.

The ARC's procedures, GAO said, raised too many questions that need to be resolved before expanding the system. And the report suggested that it may of that region's problems - unemployment and outmigration - are no longer major.

Chiefly because it is the most visible and most heavily funded of the regional commissions, the ARC has been a magnet for critics for years.

Presidents since Lyndon B. Johnson have made the ARC a popular spot for placing appointees and friends. Governors have tended to treat ARC casually, except as a money source; few Appalachians have been hired to help solve the problems.

More to the point, perhaps, critics of the ARC have argued that the federal-state partners have not faced up to the region's worst joint problems - stream pollution, acid mine drainage, strip-mine regulation, poor housing, below standard education, energy development.

But New York Gov. Hugh Carey, states' cochairman of the ARC, told congressional committees it is "the only governmental organization I know of where programs are initiated by local people in accordance with local needs, rather than being handed down by a distant bureaucracy . . .

"This is the only program we have where policies are made in partnership after debate and consultation, rather than in the form of mandates appearing in the Deferal Register."

In an era in which federal regulation has become a dirty word, the testimony of Carey and other commission advocates got a warm reception on Capitol Hill.

Exceptions were Simpson and Chafee, who hammered away with criticisms and warnings, to little avail. Both cautioned that the states were about to become part of a new level of subnational government accountable to no one.

"It smacks of a total lack of confidence in the present American system of government," Simpson said." . . .What began as a tightly knit task force directed to priority goals has now become an organization which wants to coordinate all available federal programs an play power broker for the taxpayer's dollar." CAPTION: Picture, SEN. ALAN K. SIMPSON . . . a tough challenge