The House Appropriations Committee slashed $10 million from the District of Columbia disability retirement fund yesterday and told city officials to step up efforts to block or revoke pensions of police and firefighters capable of perfoming at least limited duty.

The city must "stop this racket," Rep. William H. Natcher (D-Ky.), chairman of the committee's panel on the D.C. budget, told the committee as he sought and received support for the reduction.

Disability pensions cost the city $34.4 million last year, more than double the cost in 1970.

"Steps should be taken immediately to bring this (disability) program under control and stop the abuses and the rapidly increasing costs of retirements," the committee declared in a formal report.

Although the proportion of retirements on disability has dropped from 98 percent in 1969 to 55 percent in 1977, the committee noted that "disability retirements have been more the rule than the exception and this practice should not be allowed to continue."

By contrast, disability retirements in New York and Los Angeles run about 19 percent, the committee said.

The $10 million cut in the retirement fund will result in a total appropriation of $54.9 million. That will be more than enough to make pension payments to any current retiree. The appropriations are larger than current needs in order to build up the fund for future years.

The report made it clear that the committee is using the fund cutback to force reforms.

Natcher and his D.C. subcommittee, which had criticized the disability program in past years, renewed their interest last spring after numerous stories in The Washington Post focused on the standards used in granting retirements.

The stories appeared after three high ranking officers - former fire chief Burton W. Johnson, former police chief Maurice J. Cullinane and former assistant police chief Tilmon B. O'Bryant - retired in quick succession on full disability after long, active careers.

In its report issued yesterday, the committee said many pensioners are working at jobs "more demanding than the duties of active police officers or firefighters." It listed security guards, bus and truck drivers, laborers, teachers, carpenters and even a football coach.

"No effort appears to be made to provide limited duties to officers who develop temporary or limited physical disabilities," the report declared, "or to return those who recover from their disabilities to positions with their department.

"The need for a full reassessment of the disability program is clearly indicated. Legislation is pending (in the Senate) that addresses benefit reforms and financing procedures. There are several administrative actions that . . . should be taken immediately . . . "

The Police and Firemen's Retirement and Relief Board, in a report to the D.C. subcommittee, said it is working on such actions, including greater use of outside medical and psychiatric consultants to review pension applications.

Currently, the retirement board depends heavily upon doctors who are members of the Board of Polic and Fire Surgeons and are paid by the city, and by doctors paid by the pension applicants.

The committee comments were made in a report on the D.C. budget for the 1978 fiscal year, which begins Oct. 1.

The total operating budget of $1.3 billion and a federal payment to the city of $164 million were approved by the committee, unchanged from the version adopted by its D.C. subcommittee last month. The budget will be considered by the full House next week.

Among $27 million in cuts from the city's budget request was $7.6 million from the fund for public welfare payments. The committee called for "immediate steps . . . to remove ineligibles from the rolls." The Department of Human Resources, which administers the welfare program, is now recruiting 180 employes authorized by Congress earlier this year to review welfare eligiblity.