August 6, 1981

Prodded insistently by President Reagan, Congress has slashed or abolished this year dozens of Government programs originally enacted to cure or ameliorate a wide variety of social and economic problems. Less conspicuously, Congress has been turning to the tax system as another way to solve many of the same problems. The debate over the 1981 tax-relief bill centered on the President's proposals for three years of uniform, across-the-board cuts in individual tax rates. Almost unnoticed were billions of dollars of tax concessions to deal with particular problems.

Controllers' Strike The first dismissal notices were sent out by the Government to 55 striking air traffic controllers after they defied an ultimatum from President Reagan that they return to work or forfeit their jobs. The overwhelming majority of the more than 12,000 controllers who began the illegal strike Monday continued to hold ranks to compel the Government to grant their economic demands, raising the prospect that thousands of dismissal notices might be issued. The first jailings of striking controllers for failing to obey court orders took place in Alexandria, Va., and Kansas City, Kan. (Page A1, Col. 6.) The number of flights rose slightly yesterday and the nation's airlines reported that more passengers were filling previously empty seats. The Government reported that 75 percent of the normal 14,200 daily flights had been handled by supervisors and other nonstriking controllers. (D20:1-3.)

SOUTH HAMILTON, Mass. FROM under the luncheon tent, where the bottles were set out on Sunday and the silver bowl of ice glinted and dripped in the August heat, the vista from the clubhouse dropped through the warm blue haze down a curving driveway, across a graceful gray stone bridge to the polo field, a distant, shimmering green. ''It's too hot to drink,'' said Susie Orthwein, whose husband, Peter, is a of St. Louis. The guests chatted, laughed, looked out over the playing fields of the famous Myopia Hunt Club. The historic golf course lay all around, the stable and kennel for the hunters and dogs were straight ahead, the pool and tennis courts to the right. Below, on the side of the stone bridge that carries the road from the clubhouse to the polo fields, is a quiet bronze plaque: ''Built in memory of Richard Mortimer, Junior,'' it says, ''First Lieutenant in the U.S. Air Service.''

THERE'S no denying that interior designers do things differently in Europe. In Italy, for example, both commercial and residential interiors can have a certain drama, a crispness and just plain stylishness that are often lacking in the United States. One good reason is the existence of many late Renaissance and Baroque buildings that provide startling and extravagant frameworks for modern interiors. It is a look that allows for the best of both worlds - the craftsmanship and intricate detailing of historic architecture and the practicality and forthright shapes of contemporary furniture.

''No question we are in trouble and the public is going to be inconvenienced.

The Federal Aviation Administration today sent out the first of what could be thousands of dismissal notices to air traffic controllers after they defied an ultimatum from President Reagan that they return to work or forfeit their jobs. The overwhelming majority of almost 13,000 controllers who began the illegal strike Monday continued to hold fast in their effort to force the Government to grant their wage and other contract demands. But late today the Administration reported the first possibly significant break in the ranks of the strikers. Transportation Secretary Drew Lewis said 471 more controllers had reported to work since this morning and that 93 more had called in to say that they would be at work tomorrow. Robert E. Poli, the president of the Professional Air Traffic Controllers Organization, said the figures were wrong, contending that ''less than 3 percent of our people have gone back.'' That would be about 390 controllers.

Government and airline officials today predicted a long-term disruption of the nation's air traffic, with flights reduced for at least a year, unless substantial numbers of striking controllers return to work. Although expressing confidence that the national air traffic control system could run ''relatively well,'' Transportation Secretary Drew Lewis, whose department includes the Federal Aviation Administration, said, ''No question, we are in trouble and the public is going to be inconvenienced. This is no cakewalk.'' The Federal Aviation Administrator, J. Lynn Helms, said that if 1,000 to 2,000 controllers were dismissed, the problems would not be severe. However, he added, ''If you say 10,000, there's no question we're going to have difficulty, and we're going to have difficulty for a year.''

A column of 173 bus and trucks ended a two-day blockage of a downtown street intersection here today after workers in the Polish capital had staged a two-hour strike to protest food shortages. The peaceful dissolution of the convoy, cheered by thousands, ended a confrontation between the independent trade union and the authorities. But there were no signs that union locals planned to end their food marches. The token Warsaw strike, the biggest since March, idled the transport system and tens of thousands of industrial workers. Health services, food processing and small shops were exempted from the strike, which was called last week.

The New York Times/Larry C. Morris St. Patrick's Cathedral Is All Aglow The Lady Chapel of St. Patrick's Cathedral received a new lighting system from Harry B. Helmsley, the real estate executive. Above are the views before and after the lights were turned on, from the Helmsley Palace Hotel across Madison Avenue. The project began as an accident, when lights designed to illuminate the hotel courtyard fell on the chapel; when church representatives saw the effect, they agreed to make it permanent.

General-aviation airports report few problems in strike D19 Businesses linked to air traffic feeling impact of strike D20 European-U.S. air traffic im- proves after 2 days of delays D20 International Argentina strides into the atomic age withput help from the U.S. A2 U.S. seeking revision of sea-law treaty draft A3 Begin's coalition wins bare ma- jority in Parliament A4 Palestinian, linked to Munich massacre, is shot in Warsaw A4 Reagan letter to Congress reaf- firms Awacs deal with Saudis A4 Around the World A6 Hiroshima Mayor bids Tokyo bar atom weapons from Japan A8 New study details longterm ef- fects of atomic bombings A8 Government/Politics G.A.O. calls U.S. unprepared to carry out nuclear strategy A9 Panel on violent crime urges relaxation of rules on evidence A12 Growing suburbs bring unity to Dallas and Fort Worth A16 U.S. plans raise in building subsi- dies for low-income housing A17 Yonkers Council considers second county budget offer B2 Audit says Creedmor chief mis- used state car B6 General Around the Nation A10 Reputed New Orleans mob leader indicted in bribery case A13 Doctors discover new problem for Brady A14 Abducted 12-year-old girl returns home on Coast A18 Police rookie shoots three in error in Nashville A20 Home Section Home Achieving a European look in an American setting C1 A guide to buying home insur- ance C1 City slicker vs. indomitable groundhog C6 Viewing the Manhattan front yard: design and challenge C10 A day in the life of an old hunt club C1 Hers C2 Helpful Hardware C2 Home Beat C3 Houston's lifeline: tons of cool air C3 Home Improvement C4 Calendar of events: Flowers, dried and urban C5 Cherry is a wood often carved in style C7 Gardening C9 Farm and city: getting to know you C12 Mothers return to job sooner than they like C13 Saying it with not-too-costly flowers C14 Energy Pismo Beach, Calif., contem- plates prospect of drilling A21 Industry/Labor Brass company workers end strike that nearly cost jobs B5 Health/Science Doctors call for controls on use of antibiotics A15 Arts/Entertainment Tokyo Quartet and Heinz Holliger at Mostly Mozart C15 Eugene O'Neill home holds inter- est for theatergoers C15 Alan Hirschfield, new head of Fox, plans for new technologies C16 Marguerite Duras's film "India Song" is revived C16 Concert outdoors in Washington Square Park C16 Kraftwerk, German pop group, at the Ritz C18 Joyce Carol Oates's "Angel of Light" is reviewed C19 Bordman's "American Operetta" traces birth of a form C19 The Tubes, West Coast rock sep- tet, at Palladium C22 Carey signs bill toughening art- disclosure requirements C22 Criteria for financing arts projects are questioned C23 Sports Racing association studies ways to increase New York races B8 Oosterhuis finds perseverance pays on PGA tour B8 Misses Jaeger and Ruzici ad- vance in clay court tennis B8 Griffin goes to Cubs as Yanks complete Reuschel deal B9 Cosmos seek a bye in playoffs B9 Youngblood on All-Stars but re- mains question mark with Mets B9 Billy Mills still running - for a cause B9 Six American League pitchers to make All-Star debuts B10 Features/Notes Going Out Guide C18 Notes on People C22 News Analysis Edward Cowan examines facets of the new tax law D1 William Serrion on organized labor's view of Reagan position D21 Editorials/Letters/Op-Ed Editorials A22 The shelter shenanigans So that whales may survive Topics: little white lies Letters A22 William Safire: the deception managers A23 Firuz Kazemzadeh: for Bahais in Iran, a threat of extinction A23 William Epstein: stopping atomic bombs A23 Eli M. Noam: divergent goals for the deregulators A23

The British Government said today that it will soon stop posting a key interest rate in an attempt to allow interest rates on consumer and business loans to move more freely. The decision to no longer post the so-called minimum lending rate was one of several measures announced jointly by the Treasury and the Bank of England to improve the management of the nation's money supply and equalize control over Britain's financial system. The result is likely to be more volatile interest rates for consumer and business loans, with those rates probably rising at the outset. Much like the Federal Reserve in Washington, the British Government has found that past methods of conducting monetary policy have not produced smooth, moderate increases in the money supply, which many economists see as a key factor in controlling inflation. So experiments with alternative techniques are being undertaken. In addition to the minimum lending rate change, the Government also announced several other measures involving reserve requirements and banking procedures.

''Insurance is not mysterious - it's just that a lot of things aren't black and white,'' said Bradley Brown, a Manhattan insurance executive, offering an appropriately paradoxical description. Home insurance is both gray and mysterious for most people. As a result, many homeowners have given up trying to figure out if their property is adequately insured or if the premium is reasonable. According to a national survey by an industry trade group, 67 percent of insured homeowners did not bother to update their policies between 1976 and 1979, despite inflation's effect on the value of their property. Even some homeowners who compensate for the increased market value of their homes still are ''seriously underinsured,'' according to an independent home appraisal company, because the inflationary cost of labor and materials needed to rebuild a house have outpaced market value in some areas. For instance, the cost of rebuilding a house in Long Beach, California would cost 37 percent more than it would to rebuild the same house in Manchester, New Hampshire, according to McGraw-Hill Cost Information Systems, one of a number of computer-based appraisal companies serving the industry.