President Reagan's budget knife has sliced through the planned Metro Green Line, the transit system's inner-city subway. The budget proposed for 1983 would shave the federal funds provided for all Metro construction from #375 million to a maximym of $295 million -- $152 million of it earmarked for the Green Line.

That reduction alone is enough to cause serious construction delays for the Green Line and possibly raise the question of whether it will be built at all. Yet the history of the city's role in the Green Line dilemma suggests that more is at play here than Ronald Reagan.

The Green Line would run from southern Prince George's County through Anacostia, Shaw, U Street, Columbia Heights and Georgia Avenue as it went out to Greenbelt in Northern Prince George's.

It has been the subway line that city politicians and Metro system officials have pointed to as proof that Metro is not a subway solely for suburban commuters. The Green Line was also Metro's answer to blacks who said that the subway was really constructed to serve whites while blacks were kept to Metro buses.

"The Green Line was the line that was held up in the middle of the black power movement as proof that blacks could get something they needed from the white establishment," says Darwin Stolzenbach, who is writing an official history of the Metro system.

"Walter Fauntroy the first head of the Washington Area Mass Transit Authority and now the District's delegate in Congress told me," he says, "that when he came back from walking with Martin Luther King he fought hard to get an inner-city line on the subway to show black people that they could work within the official system."

Still, while nearly 40 percent of Metro is operating and another 30 percent under construction, work on the Green Line has barely begun. Even under the best of conditions, it may not be completed until the last decade of the 20th century.

"It's a crime that it has never been built," says William Fauntroy Jr., an urban planner for the District portion of Metro and the brother of the D.C. delegate. "At least some part of that alignment should be under construction. It's not the total fault of Metro, either. The final hearings on the line were held in 1973."

Long before the Reagan budget ax fell--long before Reagan became president--a tangle of homegrown political confusion began chipping away at the Green Line's future. No city politican has taken a stand behind any design plan for the subway and shepherded it through the protests of politically influential citizens groups.

Thomas Downs, director of the D.C. Department of Transportation, insists that the Green Line is a concern among city politicians. "Both the mayor and the City Council have told me that the Green Line is their number one priority in the Metro system," he says.

"It would serve people in the city who are in need of transportation. One-half of all heads of households along that line have no access to automobiles and have to depend on public transportation for getting to jobs, medical care, educational institutions and entertainment," says Downs.

Since 1975, the District has been involved in a fight over where the line should go after it passes through the Columbia Heights stop at 14th Street between Kenyon and Irving. Should it go along Rock Creek Church Road or New Hampshire Avenue? Should the Georgia Avenue Station be built?

There is also strong controversy surrounding the Fort Totten station, where neighborhood groups have asked Metro not to build an elevated track on South Dakota Avenue. The residents prefer a quiet underground tunnel. But that would cost about $400 million more.

Council member Jerry A. Moore Jr. (R-At large), who is chairman of the Metro Board, did manage to get a compromise agreement to have the Green Line built as far as 14th and U streets, the location of the U Street station.

And when suburban jurisdictions wanted to borrow District funds to complete construction on another part of Metro, Moore says he used that opportunity to have the construction schedule for the Green line moved up to 1983.

Again, trouble. And this time on two fronts.

First came a dispute, and lawsuit, over where the line should stop in Prince George's County: at Branch Avenue or at Rosecroft, near the race track. That dispute has the location of five stations on the Green Line in question. A federal grant application was denied for a parking lot at the Anacostia station. Then came the proposed Reagan budget cuts.

Much of the Green Line already is in place. Four stations--Gallery Place, L'Enfant Plaza, Archives and Waterfront--are structurally complete to handle the Green Line, according to Metro spokesman Cody Pfanstiehl.

"By not having the Green Line we most assuredly detract from District patrons' opportunity to use rapid rail," says Moore. "That line was to be called the Central City Line. It held great promise not only for transporting people, but for economic development for a downtrodden part of the city. . . . Right now, I cannot tell you when we may see the Green Line."