A hearing room on Capitol Hill may be an unlikely place for discussing a profound issue of human development that has befuddled scientists and philosophers for centuries.

But that did not stop the National Commission on Children from holding a hearing last week on "how children develop values."

It was a lively, if diffuse, discussion.

Phyllis Schlafly, the conservative foe of feminism, used the occasion for an attack on "value-neutral" schools through which "children are cut loose from the values and the standards" they ought to live by.

John H. Buchanan Jr., chairman of People for the American Way -- a group that usually battles against what Schlafly is for -- suggested that as a society, the nation places "a low priority on their obligations of citizenship." He thinks the schools would do well to teach values rooted in the Declaration of Independence and the Constitu- tion.

Gary David Goldberg, creator of the "Family Ties" television series, said that while many Americans long for the old days of strong communities, nurturing neighborhoods and traditional families, it's useless to try to "wish them back into existence."

Goldberg told the commissioners: "We can't keep punishing our families for not being Ozzie and Harriet," who headed the happy television family.

The hearing did not resolve how children develop values, but that it was held at all highlighted an important new trend in discussions of social problems: Nearly everyone, from right to left, agrees social programs alone are not enough and if children are not taught "good values," the odds are high that crime, teenage pregnancy and drug abuse will increase further.

That's the easy agreement.

The hard part is to agree on which values to teach, and how and where to teach them. As Sen. John D. Rockefeller IV (D-W.Va,), chairman of the commission, put it, "there is less agreement, or simply less understanding, on the best way to convey desirable values to children and on how we can or should delineate responsibility for the development of these values."

If last week's hearing was unusual, so is the National Commission on Children, a 36-member group established by Congress in 1987 and charged with assessing "the status of children nationwide and to develop a policy agenda to improve their health and well-being."

A third of its members were appointed by President Ronald Reagan, a third by the House leadership and a third by the Senate leadership.

The commission has held a series of hearings and issued a gloomy interim report about the problems confronting American children.

Specifically addressing the values question was broached especially by the commission's more conservative members, and therein lies the first point of controversy.

Reflecting the view of the commission's more liberal members, Barry S. Zuckerman, director of developmental and behavioral pediatrics at Boston City Hospital, said that although he agreed values are important, the danger is that talk about values could become a substitute for direct services to children, such as improved medical care and nutrition programs.

But for conservatives, programs are no substitute for good values. The leadoff witness at the hearing, Health and Human Services Secretary Louis W. Sullivan, launched a vigorous attack against those who see the poor mainly as victims of society, people who could expect few rewards for good behavior.

Sullivan asserted that "for young people growing up in otherwise unfavorable circumstances, values pave the road out of poverty and toward prosperity and fulfill- ment."

"The tragic truth is that the language of 'victimization' is the true victimizer -- a great crippler of young minds and spirits," Sullivan said. "To teach young people that their lives are governed -- not by their own actions, but by socio-economic forces or government budgets or other mysterious and fiendish forces beyond their control -- is to teach our children negativism, resignation, passivity and despair."

If mere talk about values can have ideological overtones, deciding which values to promote can be a political and philosophical can of worms. For example, even if most Americans agree schools should teach that it is a bad idea for teenagers to have babies, they are likely to disagree on what schools should say about such matters as sexual abstinence, birth control or abortion.

Cheri Hayes, executive director of the commission, said disagreements can arise even over teaching the value of honesty. If honesty is the highest value, she said, then what does one say to students about the brave souls who protected and concealed Jews in Nazi Germany?

But values questions are not always so complicated and the commissioners heard testimony suggesting there are certain values so broadly accepted that public schools could teach them without much fear of offending anyone.

Ted Ward, a professor at the Trinity Evangelical Divinity School in Deerfield, Ill., said everyone could agree it was "wrong, very wrong," to lie, murder, take unfair advantage of fellow human beings or treat others with disrespect.

Allan Carlson, president of the conservative Rockford Institute and a commission member, said in an interview that while he agreed with Ward, he worried schools would end up teaching "cut-flower values," shorn of their roots in religion and communal custom. Yet court decisions, he said, make it nearly impossible for public schools to link values with any religious traditions.

"You can come up with nice lists of things like honesty and keeping your finger nails clean," Carlson said. "The Ten Commandments are a great list. But when these values are stripped away from their cultural contexts, they don't have any life. They tend to become banal and not compelling to children."

The two pediatric specialists on the commission took a different tack, arguing in interviews that far too much attention is paid to the specific content of "values education," when what matters most to children's moral attitudes is how teachers behave.

"The first step is teachers and whether they are they moral people," said Zuckerman. "Even more important than what they teach is how they act."

"My own view is that sermons don't work," said Donald J. Cohen, director of the Child Study Center at Yale University Medical School. "What works is action."

Despite the talk about what public institutions could do to instill good values in children -- whatever those values might be -- virtually everyone on the commission agreed the family is the best place for moral education and that steps need to be taken to strengthen family life.

Even here, though there was controversy, with television producer Goldberg scoring President Bush for vetoing recently a bill that would have mandated leave for parents of newborns. This was a clear case, Goldberg said, of putting business concerns ahead of the needs of families. Several conservatives on the commission defended the President.

Given the potential booby-traps and land mines, Hayes said, it is unlikely the commission will produce its own Ten Commandments, when it produces its report next March. "My own sense isn't that the commission is going to recommend a set of values," she said.