A congressional battle is brewing over a bill that would reduce the Consumer Product Safety Commission from five members to three.

The controversial proposal is part of the CPSC reauthorization bill introduced by Rep. Henry A. Waxman (D-Calif.), chairman of the House Energy and Commerce subcommittee on health and the environment. The bill is scheduled to be marked up next week.

Supporters of Waxman's bill argue that trimming the size of the commission would save $400,000 in salaries of the two commissioners and their staffs, plus $450,000 by consolidating the agency's downtown office with the headquarters staff in Bethesda.

Supporters also argue that eliminating two commissioners would open up staff positions so the agency could hire additional scientists and engineers.

"The CPSC needs more scientists and engineers," Waxman said yesterday. "This small agency can no longer afford the care and feeding of five political appointees. Elimination of these two positions will increase the number of technical and scientific staff at no additional cost to the agency."

But CPSC Chairman Terrence M. Scanlon, who opposes the measure, said the savings will be minimal because the bill would also increase the commission budget. He said that Waxman's proposal is politically motivated, designed to take away two of President Reagan's appointments.

"I think the five-member collegial body works quite well," he said. "I don't see any advantage to three members. There should either be a single administrator for efficiency or the existing five-member body."

Waxman's bill would, in effect, prohibit the appointment of any commissioner after Sept. 30 if that would give the CPSC more than three members. That would mean that Commissioner Carol G. Dawson could not be reappointed when her term expires Oct. 26, opponents say. Dawson and Scanlon, both Reagan appointees, have taken strong stands in favor of deregulation.

Since the seat of former CPSC chairman Nancy Harvey Steorts is still vacant, the commission would include Scanlon, Stuart M. Statler, a Carter appointee who often advocates consumer product regulations that the administration opposes, and Saundra Brown Armstrong, a Reagan appointee who often sides with Statler.

Waxman's bill would also establish a floor on the number of commission employes to block further Reagan administration personnel cuts, relax the commission's procedures for disclosing information to the public and give the board some authority to regulate rides in permanent amusement parks. INVESTIGATING ALL-TERRAIN VEHICLES . . . Meanwhile, the CPSC continues its in-depth investigation of the rising number of deaths and injuries associated with three-wheeled all-terrain vehicles (ATVs).

The agency held a public hearing in Jackson, Miss., on May 30 and has scheduled four additional hearings during the summer in Dallas, Milwaukee, Los Angeles and Concord, N.H.

"In just the first four months of 1985, the commission has witnessed a startling 80-percent surge in the number of ATV-related injuries treated in hospital emergency rooms as compared to the same four-month period in 1984," Statler said.

"The number of deaths that we know of has zoomed to 161 over the past three-plus years," Statler added. "From our analysis thus far, 45 percent of the victims were kids under 16 years of age, and 24 percent were kids under age 12."

Scanlon said that the CPSC might eventually recall or ban ATVs if industry drags its feet on producing a voluntary safety standard. The CPSC has published an advance notice of proposed rulemaking on the vehicles, an action last taken by the agency in 1982. "When you do that, you're serious," Scanlon said.