William Bradford Reynolds, head of the Justice Department's Civil Rights Division, was accused in a congressional hearing yesterday of contributing to a climate of increased racism in the United States.

"There is new and increasing racism in this country," said Rep. Harold Washington (D-Ill.), " . . . manifested in the way some now feel they can treat blacks and minorities. You have pursued a policy of active reversal. The signals you have sent to the country make you somewhat accountable for what's going on. It suggests to racists that they can return to business as usual without fear of government retribution."

Rep. Don Edwards (D-Calif.), chairman of the Judiciary subcommittee on civil and constitutional rights, said Reynolds believes he has "superior knowledge" on civil rights issues. Edwards told Reynolds: "The steps you are taking may prove to be disastrous to the people whose rights you are charged with protecting.

"You know better than the Supreme Court how to interpret the Constitution. You know better than district court judges . . . . You know better than school superintendents and education researchers . . . . You lecture civil rights groups, yet you have been in your present position for less than a year, and you come to us with very little experience in civil rights.

"On the basis of this limited experience, you are prepared to do away with remedies that were achieved by civil rights groups only after great sacrifice and suffering, remedies that have been enacted by Congress, approved by the courts and that have brought about the progress that has been achieved in this country in the past 15 years," Edwards continued. "You promise new, more effective, remedies, but you do not tell us what they are."

Reynolds defended the administration's record as the subcommittee considers the fiscal 1983 budget authorization for the Civil Rights Division. He acknowledged the criticisms, but said, "This administration is understandably proud of its record enforcing the civil rights laws during its first year."

He conceded that the division opposes mandatory quotas and forced busing as remedies for job discrimination and school segregation, respectively. In nearly three hours before the committee, often under hostile questioning, Reynolds said he is looking for new and better ways to desegregate schools, ensure voting rights and ease employment discrimination.

"While we are trying new approaches in some areas, no one can fairly conclude from this record that we are not working towards the same end that is shared by all Americans, . . . equality of opportunity and fairness of treatment for all," he said.

"I know that our approach to involuntary busing has been seriously questioned by civil rights groups . . . as rolling back the clock on civil rights advances. We do not see it that way," Reynolds said. Instead of busing, the division will file suits or seek improvements in school districts that place inadequate resources in mostly minority schools, he said.

"Are you going to put federal money into the state and local schools" to upgrade the education? Edwards asked. Reynolds said he would expect the money to come from state and local funds.

On the issue of job discrimination, Reynolds said the division has shifted from requiring goals and timetables for minority hiring to an emphasis on employers' recruitment policies.

Reynolds said he is avoiding hiring quotas that "may confer an undeserved benefit on nonvictims of discrimination at the expense of more qualified persons who are themselves innocent of any discrimination or other wrongdoing."

He added that rigid quotas have a "stigmatizing effect" on minorities, who are "perceived as unable to make it by themselves."