William Bradford Reynolds, chief of the Justice Department's Civil Rights Division, said yesterday that a bill backed by civil rights groups to reverse a 1984 Supreme Court decision would "stretch the tentacles of the federal government into every crevice of American life."

Reynolds said the bill, supported by a bipartisan coalition of lawmakers, would "dramatically" and unnecessarily expand civil rights enforcement. He said the Reagan administration's "remarkable" record on such enforcement has "brought us to the brink of victory" against discrimination.

Reynolds' remarks at a joint House committee hearing were met with expressions of outrage by Democrats and skeptical questioning from Republicans.

"Is there anyone in Congress who believes we hadn't retrogressed in the field of civil rights?" asked Rep. John Conyers Jr. (D-Mich.). "It's widely acclaimed that there is slippage going on. This is another case of Brad Reynolds against the world."

At issue was the Civil Rights Restoration Act of 1985, designed to reverse the Supreme Court's 1984 Grove City College decision limiting coverage of the 1972 civil rights law banning sex discrimination.

The court said the ban against sex discrimination applies only to programs receiving federal funds and not to the entire institution. Civil rights groups said the decision has led to a dramatic cutback in enforcement of laws protecting minorities, women, the elderly and the handicapped.

Both the administration and civil rights groups say they want to overturn the decision. The administration, however, wants to reinstate mandates for education only. The measure supported by civil rights groups would apply to other institutions, including state and local governments.

Benjamin L. Hooks, executive director of the NAACP, Judy B. Goldsmith, president of the National Organization for Women, and Arthur S. Flemming, former head of the U.S. Commission on Civil Rights, called for swift passage of the broader bill.

"Some Pollyannas would have us believe that racial discrimination has been eliminated from the fabric of American society," Hooks said. "A look around the country will show that Jim Crow is alive and well in America, albeit in a slightly more subtle form."

Goldsmith said that the Department of Education has dropped or put on hold more than 60 sex discrimination cases since the Grove City ruling.

She said federal officials refused to investigate one sexual harassment complaint by a Northeastern University coed because the alleged harassment occurred in a building that was not built with federal funds. The university, she added, received more than $11 million in federal funds in 1984.

Goldsmith told a joint hearing of the House Education and Labor Committee and a House subcommittee on constitutional rights that the Grove City decision has "changed the lives of real people . . . . All we are asking is a restoration of our rights."

An effort to overturn the ruling attracted broad support last year, but Senate opponents filibustered it to death in the closing days of the session.

The Reagan administration, which supported the filibuster, this year has thrown its weight behind a narrower bill, sponsored by Senate Majority Leader Robert J. Dole (R-Kan.). The measure would bar discrimination only at education institutions receiving federal aid.

Reynolds said the "ideological" bill backed by civil rights groups goes far beyond reversing the Grove City decision, which he hailed last year as an administration victory.

"Nothing about the bill even hints at a restoration," he said. "Instead, it uses the extension of a federal dollar as the excuse for opening virtually every entity in this country -- public and private -- to federal supervision, regulation, intervention, intrusion and oversight.