D.C. City Council Chairman David A. Clarke recommended yesterday that the council redirect $16.7 million of the mayor's proposed fiscal 1986 operating budget to establish a $10-million rent subsidy program and add $4 million to the city's drug abuse programs, among other changes.

The other $2.7 million in redirected funds would include $183,000 for council staff, $44,000 for the D.C. auditor's staff, $1.3 million in assistance to families with dependent children and $1.2 million to retire the city's general fund deficit, under Clarke's recommendation.

He also recommended that the District request a $23.3 million increase in the proposed $425 million federal payment from Congress and use the entire increase to help retire the District's deficit.

While Clarke accepted most of the budget recommendations from the council's standing committees, he rejected controversial budget recommendations made by Charlene Drew Jarvis (D-Ward 4) that would give the council overseas travel funds and increase the resources available to the council's housing committee, which she heads.

"I think this proposal reflects the overall perspective of the council," said Clarke, who added that he had consulted with other members.

Clarke said Jarvis had inappropriately recommended that the council use or control funds designated for other agencies. Other council members have said that Jarvis' proposals had become a source of embarrassment because she appeared to be "empire building."

Jarvis was angered by Clarke's action and said her recommendations had caused Mayor Marion Barry to offer "receptive ears" to the council's demand to be an equal partner in running the government and that Clarke was attempting to "remove the evidence" of her efforts.

"The chairman has trouble with leadership," Jarvis said. ". . . Many of these recommendations speak to oversight and I've never heard of a council chairman who didn't want to increase oversight responsibility."

Clarke noted, however, that his proposal adds an additional five staff positions for council members to address the question of oversight. He also said: "I do believe that I have the council behind me and I consulted with the council in her [Jarvis'] presence."

The chairman's proposal states that "the council is adamant that it be recognized and treated as an equal partner in the D.C. government and will be ever vigilant to assure that that is the case with respect to these programs and others."

To fund new programs, Clarke's proposal would reduce the budget by $5.8 million by requiring agencies that would receive an increases for equipment, supplies and communication facilities to hold the inflation assumption to 5.9 percent.