A Reagan administration representative told a House subcommittee yesterday that the Justice Department supports a controversial bill that would virtually eliminate the power of the federal courts to order busing in school desegregation cases.

Assistant Attorney General Theodore B. Olson said the department believes that the bill, which would bar federal judges from ordering pupils bused more than 15 minutes or five miles from their homes, is constitutional.

Critics, including three former U.S. attorneys general who testified before the committee last week, say the bill is unconstitutional. They contend, among other reasons, that it might bar the Supreme Court, as well as lower federal courts, from ordering busing. Even withdrawing that remedial power from lower federal courts poses a constitutional problem, some critics have said, because federal courts wouldn't be able to order busing even if there were no other way to cure unconstitutional segregation.

The bill, which passed the Senate in March after a four-month filibuster, would also block the Justice Department from seeking busing as a desegregation remedy and allow the department to go to court to overturn earlier busing orders.

"We do not believe that the Constitution requires our children to spend their childhood on buses riding the highways and freeways of our cities in the early hours of the morning and the late hours of the afternoon," Olson told the House Judiciary subcommittee on courts.

Olson said the department doesn't believe the bill covers the Supreme Court, even though its major Senate proponent, Sen. J. Bennett Johnston (D-La.) has said he intended to limit the high court's busing powers as well.

The bill, Olson said, "is a constitutional exercise of Congress' authority under . . . the Constitution to create the inferior federal courts and to place restrictions on their remedial authority."

Federal courts would retain power to hear desegregation cases, he said, but simply wouldn't be able to order extensive busing to remedy the problem.

Olson distinguished between cutting back on the remedies courts can impose and other proposals that would entirely eliminate the federal courts jurisdiction over such controversial subjects as abortion and school prayer.

The Justice Department has said that it believes a bill abolishing federal court jurisdiction over school prayer issues is unconstitutional.

"This is not a jurisdiction stripping bill," Olson said.

But subcommittee chairman Rob ert W. Kastenmeier (D-Wis.), who is strongly opposed to the measure, said, "This is certainly court tampering."

Olson said the department "would prefer not to" use its powers under the bill to attack previous busing orders. For the department to bring such lawsuits, he said, would be "scraping away scabs."

After the hearing, Kastenmeier said Attorney General William French Smith's decision not to come himself reflected the administration's lack of real commitment to the measure. "If he really cared about it he would be here," Kastenmeier said.

Kastenmeier, in a June letter to Smith, said it was "essential" that Smith "testify in person."

John Shattuck of the American Civil Liberties Union, which is lobbying heavily against the various bills stripping power from federal courts, said that Olson's testimony contained "constitutional sleights of hand of the highest order" contrary to the "plain language of the bill" and "any reasonable interpretation."