President Reagan yesterday shrugged off Department of Health and Human Services projections that 685,000 families would lose all or part of their welfare benefits under the budget cut proposals he sent to Congress this week. w

Reagan said "we heard the same thing when we reformed welfare in California," according to deputy White House press secretary Karna Small. She said the president was not surprised by the report that about one-sixth of the households receiving Aid to Families with Dependent Children would be affected by the cuts.

Small said the president cited his experience as governor of California and said, as he often has over the years, most recently at his press conference last Friday, that 350,000 people simply disappeared from the welfare rolls after his reforms with "no indication that any were victims of destitution."

Small shied away from saying that this means the 658,000 families that would be affected by the Reagan cuts are considered to be welfare chiselers. She gave the impression that some are, however. "We would be hopeful that some people would drop off the rolls," she said.

Reagan has pledged that the "truly needy" will not be hurt by his budget cuts. Most of the households receiving AFCD have less than the $8,410 annual income for a family of four that the government considers the poverty line.

Under questioning by reporters, Small said it is conceivable that a family can be under the poverty line but not be considered "truly needy."

"The question is: 'What is the alternative?'" Small told reporters. "We are trying to get across that the main thrust of this whole program is an improvement in the economy."

Reagan was asked yesterday whether he still sticks to his policy of not negotiating with terrorists and replied: "Yes, you can't do business with them."

He added, however, that he could not blame the Pakistani or Syrian governments for their actions in attempting to free the hostages being held in a hijacked plane in Damascus.

"This kind of case was very difficult, was a very difficult one for us," Reagan told reporters as he left the White House to visit Sen. Bob Dole (R-Kan.) in Walter Reed Hospital. Dole is recovering from kidney surgery.

Reagan gave Dole a copy of George Gilder's "Wealth and Poverty," a book in praise of supplyside economics. He said the senator seems to be doing well.

On leaving the hospital, Reagan said he would have to know what the risk and price were before answering whether it worried him that Pakistan had bargained with the terrorists.

Earlier, Small had said the United States put no pressure on Pakistan and was not a party to the negotiations. Small said the State Department had been monitoring the crisis with a 24-hour task force and an open phone line to Damascus.