What was going on when I was born?

New flaws forced transit officials to take one-sixth of New York City's Grumman Flxible buses out of service yesterday for an indefinite period. After conducting all-night inspections, the Transit Authority said they had found cracks near the rear wheel wells or in the front axle assemblies of 162 buses. Officials said they would be able to maintain normal service. It is the second time in less than a month that the authority has found defects in large numbers of its 871 Grumman Flxible buses, most of which began service in 1980. The buses make up about a fifth of the city's total bus fleet.

The Justice Department filed suit in Federal District Court today charging the city, Mayor Kenneth A. Gibson and other law enforcement officials with ''egregious and flagrant unconstitutional conditions'' in the city's jails. The complaint charges that conditions at the Green Street cell block and at three of the four police precinct holding units constitute ''cruel and unusual'' punishment and subject the inmates ''to life-threatening and health- threatening conditions.'' The Government is seeking an injunction to bar the city from confining prisoners under these conditions. Thomas Stewart, a Justice Department spokesman in Washington, said the court could order the city to correct the conditions if the case was not settled before going to trial.

If tax deductions grew on trees, business and job-related expenses would be among the most prolific branches - and also among the thorniest. Self-employed business people and outside salesmen have a far greater range of expenses that may be written off than most corporate employees do. But employees may deduct many costs incurred personally for their jobs or to improve their professional standing. ''It has to be an item that is intended to help you earn income or enhance your income,'' said Leon M. Nad, national director of technical tax services at the accounting firm of Price Waterhouse. Employees may deduct union dues, the cost of small tools, dues to professional associations, subscriptions to trade journals, the purchase and cleaning costs of uniforms, business phone calls made from home and even the cost of renting a tuxedo for a business-related function.

A high-ranking Nicaraguan official said today that the Government was prepared to grant financial subsidies and guarantee television and radio time to opposition parties in presidential elections promised for 1985. He also pledged that the army would accept the authority of the winner, even if from another party. The official, Tomas Borge, Minister of the Interior and one of the nine- member directorate, said in an interview that the Sandinista leadership might lift press censorship completely in the final phase of the political campaign. He estimated the campaign would last four to six weeks.

An 85-year-old former college president who has been fasting in a Syracuse nursing home to hasten his own death should be permitted to die, a state judge ruled yesterday. After hearing testimony on the patient's competency from his doctor, psychiatrist and daughter, the judge, Justice Donald H. Miller of State Supreme Court in Syracuse, ruled that the nursing home was neither obligated nor empowered to force-feed him. The man - the court ordered that his identity be kept secret - was said to be depressed over a series of illnesses. He has been fasting since Dec. 21.

An article in the Business People column on Wednesday incorrectly characterized the status of George A. Warde at Air Micronesia. A corrective article appears today on page D12.

A vast tank, rocket and artillery battle erupted today between the Lebanese Army and anti-Government Druse and Shiite militiamen in Beirut and across the surrounding hills. Government sources said it was the biggest battle between the army and the Syrian-backed militiamen since fighting in the Shuf Mountains ended in September. Lebanese television said 250 Palestinians entered Beirut this evening and joined forces with the militias. Shells burst in populated areas extending from Junieh, 16 miles north of here, to the Druse-dominated Aleih district, 10 miles to the east, and the Kharrub coastal district, 15 miles south.

Friday PLAYMAKERS IN VILLAGE The Modern Times Theater troupe, which received critical praise in 1982 for ''Hibakusha: Stories From Hiroshima,'' huddles each summer to come up with an idea for a play about a current social question. Then one of the six members, Steve Friedman, writes the work, and they perform it in New York and then all over the country. They travel light; their current production - backdrop and costumes - fits in one suitcase. Called ''Freedom Days'' and directed by Denny Partridge, this play with music dramatizes four stories of blacks and whites working together in the 1960's. In one, a woman turns in her husband, a Ku Klux Klansman, to Federal authorities; in another, a young black man gives strength to fellow rights workers in jail. This production is at the Washington Square Church, 135 West Fourth Street, for a month. Tickets: $5 and $8. Reservations: 664-8933. EARLY MIDEAST PHOTOS

Excerpts from statement, page A4. WASHINGTON, Feb. 2 - The Reagan Administration told Congress today that adoption of a resolution calling for the ''prompt and orderly'' withdrawal of the marines from Lebanon would embolden ''the forces of radicalism and extremism'' in the Middle East. Lawrence S. Eagleburger, the Under Secretary of State for Political Affairs, said the resolution could also lead to the commitment of more American troops in the region ''in even more dangerous circumstances.'' Mr. Eagleburger's remarks, at a hearing of the House Foreign Affairs Committee, appeared to mark a new step in the confrontation between the White House and Congressional Democrats over the Lebanon issue, which is also emerging as a major issue in this year's political campaign.

The Economy The projected budget deficits are ''totally unacceptable,'' the President said in his annual Economic Report. While stressing that the deficits must come down, Mr. Reagan also said most major action must wait until after the November election. The report also encourages free trade, supports Federal Reserve policies to curb inflation and urges in broad terms a revision of the tax system. (Page A1.) The report said farm support policies were costly and masked serious problems in that sector. (A12.) White House economic advisers differed over whether the $100 billion reduction in deficits sought by Mr. Reagan over the next three years as a ''down payment'' would be sufficient. In Congressional hearings, David A. Stockman tried to deflect a Democratic move to widen budget cuts, while Martin S. Feldstein said Mr. Reagan's plan was insufficient. (A16.)

Even though Democratic attacks on President Reagan's foreign policy record are growing, Administration officials say they are in a good position to face an election-year onslaught if there are no catastrophes or surprises. The officials acknowledge the volatility of foreign policy issues in the campaign and President Reagan's vulnerability in that field, particularly regarding the Marines' presence in Lebanon. Nevertheless, they say they believe it is unlikely that he will look for face- saving pretexts to get the Marines out, despite the risks of further casualties, and that they are convinced he will continue to back the Salvadoran Government, with all the questions about its survivability and abuses of human rights. Arms Concessions Doubted They also do not foresee Mr. Reagan making major concessions to break the deadlock in arms control talks with the Soviet Union. This was the consensus of a range of White House, Defense and State Department officials interviewed in recent weeks. They are seeking to foster achievements that will reflect well on Mr. Reagan, but they argue that, as matters stand, he can hold his own.

In a partial victory for the New York Stock Exchange, a divided Securities and Exchange Commission cleared the way today for the exchange to trade options on two indexes composed of the stocks of telecommunications companies. But the agency voted to delay trading on the new options for at least a month to give the securities industry time to study how to handle the proliferation of the new products. The two so-called narrow-based indexes are one composed of the stocks of the seven regional telephone companies spun off by the American Telephone and Telegraph Company on Jan. 1 and one that included the new A.T.& T, MCI Communications and other companies.