The event was a markup session on the 1987 budget, and the question was whether to restore funds for the general revenue-sharing program. Some House Budget Committee members were assertive in saying yes. Rep. Lynn M. Martin (Ill.), the panel's third-ranking Republican, was contending otherwise.

Her point was that the committee should stand firm because the deficit-ridden federal government, simply put, had no revenue to share with local governments. The argument was not new, but the way Martin punctuated it was:

"Maybe girls learn to say 'no' easier than boys," she blurted out, drawing chuckles from the panel's 30 men and three women.

"It was a smart-aleck line," Martin recalled later, laughing. "But it was pretty good."

It also was a classic example of the way the only woman in the House Republican leadership plays the congressional power game. She is disarmingly lighthearted and sometimes jokingly feminist but usually well-informed, dependably partisan and tough.

In six years on Capitol Hill, the former state legislator has become a skillful inside player. As vice chairman of the House Republican Conference, the GOP caucus, she ranks about sixth in the party's House leadership, and her stock is rising.

"I think it's just a matter of time for Lynn," said Minority Whip Trent Lott (R-Miss.).

Congressional observer Norman J. Ornstein, resident scholar at the American Enterprise Institute here, credits Martin with being "pretty much in the mainstream of her party" and well-suited for a leadership post.

The test, he said, is the ability to "walk the line between being a totally amoral partisan and being a totally nonpartisan statesman. They want somebody who is able to go to the floor and mix it up and and not give in but not be self-destructive."

Martin makes clear that she would like to move up in the leadership, and time is somewhat on her side. At 46, she is relatively young, as House leaders go, but not alone. Lott, the second-ranking GOP leader, is 44, and Rep. Dick Cheney (R-Wyo.), chairman of the Republican Policy Committee and fourth in the leadership, is 45.

The No. 3 person, Rep. Jack Kemp (R-N.Y.), is chairman of the House GOP conference and deeply involved in an undeclared campaign for the presidency. His imminent departure as chairman, however, would not lead to Martin's automatic elevation. Higher-ranking leaders such as Cheney would have an initial advantage over Martin.

Moreover, this is Martin's sixth and final year on the Budget Committee, which House rules dictate must have a rotating membership. Her only other committee assignment is prestigious, Armed Services, but she ranks 17th there among 20 minority members.

Some observers say that she still does not understand many legislative intricacies and the way the House operates. She often quips too quickly, they say. "There's still a lot of rough edges around her," Ornstein said.

Martin says she is patient, however, and has seen what happens when people move too quickly. One such person is the other fast-moving, three-term member who served on the Budget Committee, former representative Geraldine A. Ferraro (D-N.Y.), who left the House to become the Democrats' 1984 vice-presidential nominee.

"I didn't think she was any more ready than a hole in the head for it," Martin said of Ferraro's candidacy. "I do believe that the same qualifications in a man would not have propelled that man to the vice presidency, and you can't have it both ways."

Already, Martin is being mentioned as a possible GOP vice-presidential contender in 1988, but Martin said she would demur. "I wouldn't be ready," she said. Then, leaning over her desk as if to share a secret, she added, "The people have done real well without me."

Judith Lynn Morley was born and reared in Chicago. She won Phi Beta Kappa honors at the University of Illinois in Champaign-Urbana and married engineering major John Martin, from whom she is divorced. The couple has two daughters, Julia and Caroline. Before the political bug bit, Lynn Martin taught high school English, government and economics.

In 1972, at the prodding of friends, she ran for a county board seat and won. She chose to cast her lot with the most powerful panels, the finance and public works committees. Four years later, she was elected state representative and, in 1978, state senator.

When then Rep. John B. Anderson (R-Ill.) decided to run for president as a third-party alternative in 1980, Martin ran to replace him and won. She came to Washington experienced in the way lawmakers operate and in playing the insider's game. There was an opening on the Budget Committee, and a mentor, Minority Leader Robert H. Michel (R-Ill.), helped her get the seat. Martin quickly made herself at home.

Ferraro's rise in the Democratic Party helped boost Martin's GOP stock. She was a natural to play the part of Ferraro during Vice President Bush's preparations for his 1984 debate with Ferraro.

When Martin returned to Congress last year to begin her third term, the caucus vice chairman's post was open. With another boost from Michel, she became the first woman elected to a Republican leadership position.

By most accounts, Martin passed her latest test last week in what was ostensibly a losing cause. She played a major role in crafting a GOP-sponsored substitute budget that was rejected, 280 to 145. No Democrat voted for it, and 32 members of her party voted against it.

Last year, however, only 101 Republicans supported the party's official alternative. This year's vote was clear improvement, and that, according to Rep. Vin Weber (R-Minn.), "is more attributable to Lynn Martin than to anyone else."

Budget Committee members of both parties generally praised her work, not only in molding a plan that won broad GOP backing but also in representing party views without burning many bridges, though some Democrats considered her too partisan at times.

Obvious comparisons were made of her and Rep. Delbert L. Latta (R-Ohio), the committee's ranking minority member who usually takes the lead in putting together the GOP alternative, but this time was sidetracked by surgery.

"Latta is kind of an old curmudgeon, and she comes off as everybody's sister," Rep. Vic Fazio (D-Calif.) quipped.

One of the most unusual events of Martin's role as a GOP budget architect occurred on the steps of her Capitol Hill home.

There, Martin met for nearly two hours with an old friend and traveling companion, Rep. William H. Gray III (D-Pa.), Budget Committee chairman. Both were looking for areas of bipartisan agreement on the budget proposal to be presented two days later.

They shared drinks, decided against going for a spin in Gray's 1968 convertible and instead walked to a nearby store to buy some food for what Martin thought was a starved stray cat that she had nicknamed Budget (pronounced boo-jay), French for the obvious.

Neither partisan gave in, however, and the cat turned out to be a cunning neighborhood feline named Moe who had perfected the art of getting fed. "So I failed to get a cat and a budget all in the same night," Martin recalled.

Two years ago, she and Gray were getting ready to arrive at a U.S. Air Force base in West Germany.

"I turned to Gray," Martin recalled, "and I said, 'Bill, do you realize that we are going to walk out of this helicopter and those guys are going to look up at the two people that they are being told are responsible for the numbers in the defense budget and one's black and one's a woman?' And I said, 'Not only that, it's the woman that's the Republican.' "

More than such camaraderie links the two. Both are minority lawmakers who have learned to play on the inside in a way uncharacteristic of many female and black legislators.

Martin is affectionately called "one of the boys" by many of her House colleagues -- a somewhat dubious honor, in her view. But for those who watch women on the Hill, it is an indication of her success, in part because she does not, as she put it, "walk into every meeting humming, 'I Am Woman.' "

When it was noted that some credit her success to the fact that she does not "wear your feminism on your sleeve, so to speak," Martin piped back, characteristically:

"I wear being a woman not just on my sleeve, but I wear it in my sweater . . . . I don't think women legislators have to be anything but good legislators, and women."