What was going on when I was born?

FRIDAY, MAY 17, 1985 The Economy The House Budget Committee approved a 1986 budget plan which, if adopted by the House, would set up a major confrontation with the Senate and Administration over the military budget and cost of living increases for Social Security. Democratic leaders said they expect the full House to approve the plan, possibly with the addition of revenue from a corporate minimum tax. [Page A1.] President Reagan's tax revision plan drew mixed reviews from legislators, tax reformers and interest groups in Washington. Supporters, viewing the elements disclosed so far, said the President was striving for vast changes in tax policy. But others said he missed a rare opportunity to make the system more equitable. [A1.] Business representatives applauded the plan, but some expressed concern that investment incentives would shrink. [D5.]

ALONG with tulips and azaleas and the greening of Central Park, mid-spring in New York traditionally brings with it the quickening of a pop-jazz scene. This weekend, the wealth of talent representing a variety of musical fronts, in both clubs and concert halls, offers unusually rich pickings for devotees of folk music and mainstream jazz. On the folk scene, the most promising event is the return to New York of the Seattle-based folk-pop trio Uncle Bonsai. When the group made its local debut recently, on a double bill at the Bottom Line with Loudon Wainwright 3d, its witty sophisticated music received a rousingly warm welcome. Tonight and tomorrow, the trio returns to the Bottom Line as the opening act for the local folk star Suzanne Vega, whose first album was just released by A&M Records.

''It is difficult enough to raise children in New York City, and for the very people charged with educating and protecting them to be involved with drugs is a disgrace.'' - District Attorney Robert M. Morgenthau of Manhattan. [B2:6.]

A headline yesterday with a Washington dispatch about the Senate's approval of a foreign aid bill misstated the amount of aid. It is $12.8 billion.

Friday CAGE'S 'FOUR WALLS' Antedating the Minimalist movement of the 1960's by two decades, John Cage originally wrote ''Four Walls,'' a dance and music drama, for Merce Cunningham in 1944. Embodying Cage's innovative principles of silence, repetition and processes of gradual change, the piece reflects the composer's preoccupation with disturbances of the mind at a turning point in his life, shortly before he discovered Asian philosophy and Zen Buddhism. Tonight the Asia Society will present the New York premiere of ''Four Walls,'' with new choreography by Sin Cha Hong, the Korean dancer and founder of the Laughing Stone Dance Theater Company. Also featured will be Margaret Leng Tan, one of Asia's leading pianists, and Andrea Goodman, an original member of Meredith Monk's Vocal Ensemble. The performance is at 8 P.M. in the auditorium at 725 Park Avenue, at 70th Street. Tickets are $20. Information: 288-6400.

AROUND 100 years ago, two men of mature years were making the Grand Tour of European houses. Decoration in those days often ran amok in the area of ostentation, and after a long evening somewhere in Central Europe one of the two travelers said to the other, ''That house was really too much.'' ''Not for me,'' the other replied. ''I can stand a great deal of gold.'' What he was talking about was, of course, a relatively debased use of gold. People in the 1880's and 90's used gold the way people in earlier ages had used lace. They had it and were delighted to flaunt it. Quite different is the case, and the quality, of pre-Columbian objects of the kind that can be seen in a new exhibition at the Metropolitan Museum of Art that is called ''The Art of Pre-Columbian Gold: The Jan Mitchell Collection.'' These are pieces of the kind that astonished Albrecht Durer - himself a goldsmith's son - when he saw them in Brussels in 1520. From the moment that Columbus landed in Barcelona on his return from the New World, people of power and people of fine judgment were of one mind - that these were quite extraordinary objects, and all the more so for having been made so subtly and with consummate art by people of whom nothing was known.

Housing construction begun in April climbed to its highest level in a year, the Commerce Department said today. New housing was being built at an annual rate of 1.91 million units last month, up 1.6 percent from March. A surge of apartment building offset a slight decline in single-family construction. The annual rate is adjusted for seasonal variations.

A table in Business Day on Monday listing companies' quarterly sales and profits misstated the percentage drop in sales for Pitney Bowes Inc. It was 2 percent, from the first quarter of 1984.

FRIDAY, MAY 17, 1985 International Jose Napoleon Duarte, in Washington, told President Reagan that El Salvador had achieved at least a partial success in battling insurgents, and he called for new negotiations with the leftist rebel leaders. The Salvadoran President also cited progress in human rights and political stability, but acknowledged that his country still had a ''long, difficult road to travel.'' [Page A1, Column 3.] Many Sikh extremists are at large in India and abroad and are almost certain to try to carry out more bombings and shootings, according to statements attributed to Indian law-enforcement officials. [A3:1.]

When guards at the Maryland penitentiary staged a sickout last October to protest a colleague's being stabbed to death, Gov. Harry R. Hughes thought long and hard about how to respond. He then quickly ordered all 2,100 inmates locked in their cells, dispatched police Swat teams to guard them, and negotiated a peaceful end to the sickout. His approach to that incident, say longtime analysts of the Maryland political scene, exemplified his style: Unflappable in a crisis, he deliberates hard before acting and then moves decisively. ''When he makes decisions he takes his time to the point of it being agonizing,'' said Victor Cushwa, a state legislator who knows the Governor well. ''Then he stands pat to the point of stubbornness.''

Mayor W. Wilson Goode said today that ''we're far from out of the woods'' in dealing with the radical group Move, whose battle with the police Monday led to the burning of more than 50 houses. In an interview at his office, Mr. Goode said he expected Move's members and sympathizers to make ''attempts at revenge'' for the police bombing of the group's house and a fire that killed at least four children and seven adults presumed to be members of the radical back-to-nature cult. Later, in a news conference, the Mayor said it would take $6 million to $7 million to maintain the people burned out of their homes and reconstruct their houses. Fifty-three houses were destroyed after the bombing by the police of the Move headquarters on Osage Avenue, in a middle-class neighborhood of rowhouses in West Philadelphia.

Governor Kean declared a drought emergency throughout New Jersey today and announced additional restrictions on water use in the 93 hardest-hit communities. The cutbacks, he said, are intended to reduce consumption by 25 percent. The area affected by the added restrictions, in six counties in the northeast, includes Newark, Jersey City, Paterson and Elizabeth, the four largest cities in the state. The area covers all of Hudson County and parts of Bergen, Essex, Morris, Passaic and Union Counties. Limit of 50 Gallons The Governor ordered that the 2.3 million people living in the affected area limit water use to 50 gallons per person per day or pay surcharges for any additional water used.