There was an instructive little drama played out last week when the Republican leaders of Congress propounded the notion that the answer to the latest budget crunch might be to give President Reagan limited powers to impound appropriated funds. The idea died faster than talk of the Cubs' second-half pennant drive. It stayed around just long enough to remind everyone that no matter how much he may have won on Capitol Hill in his first eight months as president, it is utter nonsense to call Ronald Reagan "the king of Congress."

Congress, these days, does not recognize outside monarchs.

It does not recognize them because there is a clear institutional memory of how profoundly Congress was embarrassed by its last capitulation to such a claim of sovereignty. It came only eight years ago--in the presidency of Richard Nixon--and impoundment was the crux of the issue.

Nixon impounded--that is, he refused to spend--more than $8.7 billion of money Congress had appropriated, thus effectively vetoing the legislative action without the bother or political risk of an actual veto. There were cries of outrage, court suits and a general uproar from the Democratic majorities on Capitol Hill. But the issue was resolved only the following year, when Congress, as part of the law creating its own new budget process, made such impoundments illegal.

It was the beginning of a profound process of reasserting the prerogatives of the legislative branch, a saga which is skillfully recorded and analyzed in a new book by The Brookings Institution's James L. Sundquist, "The Decline and Resurgence of Congress."

Listening to House Republican Leader Bob Michel argue last week for a restoration of limited impoundment power to Reagan, I had the impression that the canny Illinoisan knew perfectly well that it was too soon for such a counterrevolution. Michel indicated that Reagan is given to exclaiming with some frequency that he wishes he had the item-veto power as president that he enjoyed when he was governor of California.

Michel and his Senate counterpart, Howard H. Baker Jr., have apparently explained to the president a number of times that the U.S. Constitution is not so generous to executives as is the California constitution. But Reagan keeps bringing the issue up, and one had the feeling that Michel was floating the impoundment notion as a way of showing Reagan how unrealistic his dream really is.

Be that as it may, the cold shoulder the idea received from both Democrats and Republicans on Capitol Hill showed Congress is not quite the submissive creature that some had depicted in the wake of Reagan's earlier budget and tax victories.

The problem--as Sundquist points out in the conclusion of his book--is that an assertive Congress is not at all the same thing as a Congress ready or able to provide leadership of its own. "A resurgent Congress," he writes, "is, by definition, one that has turned away from its old dependence on the executive." But Congress has not, in the eight years since it rebelled against Nixon's dictatorship, systematically addressed the conditions that would allow it to fill that leadership gap, either on its own or in tandem with the president.

The crucial questions still remain on Congress' own agenda: policy integration vs. jurisdictional fragmentation; party loyalty vs. individual autonomy; national perspective vs. parochial representation.

That the Republican leaders even considered suggesting a retreat from the impoundment victory of 1974 should be a warning sign to conscientious members of Congress. It is a signal for them to go about the work of strengthening their own institution, lest the next crisis be the one where the call for strong leadership does become an excuse for a new assertion of executive domination.