Sen. Warren Rudman (R-N.H.) said yesterday after a Senate appropriations hearing on the National Endowment for the Arts that the agency should receive more funds than the Reagan administration requested for next fiscal year.

"How much more I don't know," said Rudman, who chaired the hearing of the Senate appropriations subcommittee on the interior in the absence of the chairman, Sen. James McClure (R-Idaho). "Times are tough. But Sen. Thad Cochran (R-Miss.), a member of the subcommittee and I have had concerns about this in the past. We'll have to talk to Sen. McClure."

However, Rudman questioned why the NEA asked for a 17 percent increase in the budget for peer panels, which review grant applications, when the number of applications is expected to drop severely this year and more so next. "It doesn't seem logical that you would have an increase in panel costs with this marked decrease in applications," Rudman told NEA chairman Frank Hodsoll, and then asked him to revise the peer panel budget "so that we might have more money available" for programs.

The hearing was the first in the annual series of congressional appropriations hearings at which chairmen of both the National Endowments for the Arts and the Humanities will testify as the committees make budget recommendations for fiscal 1983. The NEH chairman goes before a House appropriations subcommittee tomorrow, and the NEA chairman will testify in the House next month. President Reagan has asked that the NEA budget be cut from the current $143 million--hard fought for by both private and congressional arts supporters--to $100 million. But unlike last year, when both NEA and NEH chairmen from the Carter era only reluctantly supported Reagan-proposed cuts in their budgets, this year the new Reagan-appointed chairmen vigorously support the cuts in their agencies' budgets.

"The proposed budget is one that will allow us to maintain momentum in increasing private support for the arts," NEA chairman Frank Hodsoll testified, adding later, "This is not to say that additional endowment dollars might not be useful. They would. The arts in America are in general undercapitalized. But this is so at any conceivable federal budget level."

Hodsoll stressed that NEA's commitment includes nontraditional arts, a point he has emphasized recently: "We support avant-garde art. We support non-mainstream art in our folk arts and expansion arts."

Hodsoll said panel costs would increase from $544,000 this fiscal year to $640,000 in fiscal 1983. "The panel system is essential to the endowment's belief that artists and experts, not government staff, make decisions on grant applications," Hodsoll said. However, according to the NEA's calculations, grant applications will go down from 27,089 in fiscal 1981 to 18,658 this fiscal year and 16,835 in fiscal 1983.

"I want to make sure that we have money for people who really need it," said Rudman after he had questioned the $96,000 increase for panels. "Five thousand dollars or $10,000 to a little folk arts group is really important."

Part of the application decrease from fiscal 1981 to 1982 is a drop of 7,000 in visual arts grant applications since the NEA decided that individual visual artists can only apply in alternate years. The visual arts program had the highest number of applicants of any NEA program and the largest rejection rate--93 percent--last fiscal year, according to Hodsoll.