The sooty clouds from industrial smokestacks used to symbolize a booming economy, but the Clean Air Act of 1970 stopped the smoke. Now the Reagan administration has decided that slowing down the smoke may also have slowed down the economy.

The president has proposed a retooling of the complex law to ease its restraints on industry. Critics of his approach warn that the changes would halt and might even reverse 10 years of progress toward cleaner air. The debate on these issues, beginning when Congress returns from its August recess, will affect every part of the society and the economy.

Here is a primer on the way the act works, some of the issues involving it and what the administration wants to do about them. The key jargon is emphasized.

National Ambient Air Quality Standards

The Environmental Protection Agency sets two kinds of standards, or air pollution ceilings, nationwide. Consulting with doctors and scientists, EPA writes primary standards for seven widespread pollutants, saying in effect that air containing measurements of pollution higher than these standards endangers public health. The seven: sulfur dixoide, nitrogen oxides, floating particles (soot and dust), carbon monoxide, ozone, hydrocarbons and lead.

EPA also writes tighter secondary standards for these seven pollutants that govern cosmetics like air clarity and environmental effects like crop damage.

Who should write the standards? After much debate over giving states this power, the Reagan administration now wants to keep it at EPA. Scientists will advise but have no veto. States are still required to have state implementation plans showing how they will tackle their pollution, but the Reagan approach would slash federal red tape for setting up and changing these plans.

What about costs? Under present law EPA cannot now consider the costs of meeting a clean air goal when setting it, only the health effect of not meeting it. The Reagan plan concurs. Costs come into play later, when EPA tells industry what it has to do in order to be allowed to pollute the air, within the national standards.

Whose health is considered? The law requires the standards to include a margin of safety to protect sensitive people like asthmatics, the aged and infants. The Reagan plan does too, but wants the standards set only to guard against "real health risks." Congress will argue over what that means.

Nonattainment areas

Areas of the country, mostly urban, that have air dirtier than the national standards are required to show progress toward cleanup. EPA requires new industry to offset the air pollution it will contribute to these areas by somehow getting existing sources in the area to reduce their pollution an equal amount. The law also requires new polluters to use the latest technology so they will pollute at the lowest achievable emissions rate (LAER).

Should deadlines be extended? The original target for cleaning up non-attainment areas was 1975. There have been repeated extensions for the various pollutants, and Reagan would extend some of the 1982 deadlines again, to 1987, for areas like Los Angeles that are in serious trouble.

Should LAER be eliminated? The Reagan plan would replace LAER requirements and several variations of it with one uniform set of technological rules called the New Source Performance Standards.

These already require new and expanding industries and processes everywhere to use the best technology that has been satisfactorily demonstrated, given cost and energy considerations -- but they do not necessarily require the best available and certainly nothing experimental. Environmentalists prefer the tougher LAER, arguing that one purpose of the law was to force the use of new technology.

How should the law be enforced? EPA can prod states to action by threatening to cut off their federal funds. EPA Administrator Anne M. Dgorsuch opposes that approach but the Reagan plan did not disavow it, as environmental groups had feared it would. Instead, the plan called for "full partnership" with the states in meeting the goals. Congress will debate that definion.

Attainment areas

In 90 percent of the country, the air is already cleaner than the National Ambient Air Quality Standards require. The 1977 Clean Air Act amendments set up a program to prevent significant deterioration (PSD) of air quality in these areas while still allowing industrial growth.

It divides the areas into three classes: parkland, wilderness and other pristine areas with first-class air where no additional pollution at all is tolerated; medium-clean or second-class areas where some additional pollution is allowed; and third-class areas where new industry may do almost what it likes as long as national standards are still met. No Class 3 areas now exist.

Are Class 2 and Class 3 divisions useful? The Reagan plan would eliminate all but Class 1 areas and would require that new industry meet New Source Performance Standards everywhere else. Environmental groups argue that the tighter controls that now cover medium-clean areas should be retained in order to spread industrial growth there over many years while keeping the air clean.

Should visibility from the parks be controlled? The law says tourists should be able to see forever in and from Class 1 parks and that states must require nearby air polluters to stop. The Reagan outline did not address this issue but the administration is expected to seek an easing of the rule. Resistance will be fierce.

Automobile standards

Since trucks and cars massively pollute the air, the law requires new models to emit fewer pollutants each year, using catalytic converters and other devices.

Should emissions controls be loosended? The Reagan plan would roll back pollution limits to half the 1981 requirements for nitrogen oxides, which contribute to acid rain, and carbon monoxide, which contributes to smog, on grounds it would save the ailing auto industry $1 billion a year. As old cars die, the air will improve enough to make up the difference, EPA said.

Environmentalists disagree, noting that most cars have already met the 1981 requirements.

Are inspection and maintenance programs worthwhile? EPA had gone to court to force states to adopt these programs, but Gorsuch thinks, they are worthless and the administration will probably seek to drop the requirement for them.

Acid rain

Acidity levels similar to weak lemon juice are killing fish in the lakes of the Northeast and Canada. When rain combines with sulfur dioxide from a coal-burining plant it forms weak sulfuric acid, and when the cloud contains nitrogen oxides the product is nitric acid. Canada blames rain and snow originating in the smoky Ohio Valley for its problem.

How should acid rain be dealt with? The administration has called for accelerated research into acid rain on grounds it is not understood. Environmentalists counter that it is understood and want a blanket reduction in the national sulfur dioxide standard that would clamp down on coal-burning plants.

Coal-burning plants

The law requires plants to use expensive machines called scrubbers, which cost $50 million and up, to achieve a certain percentage removal of the sulfur in coal, even low sulfur coal that can already be burned so that its sulfer dioxide output complies with performance standards. It was designed to help eastern states with high-sulfur coal compete with the low-sulfur westerners.

Are stack scrubbers still needed? Trying to encourage a national switch from oil to coal, the Reagan plan would kill percentage reduction rules and just regulate the actual stack emissions. But environmentalists worry that air quality will suffer. Competing coal-state politicians are watching closely.

Hazardous pollutants

Four toxic air pollutants are now regulated: mercury, vinyl chloride, asbestos and berylium, but dozens more exist. All sides agree that this program should be expanded, but disagree on how extensively.