Housing and Urban Development Secretary Samuel R. Pierce Jr. went before a House housing subcommittee yesterday to defend the Reagan administration's fiscal 1986 budget proposal, and he and the panel's Democrats promptly took up where they left off two years ago -- in an angry shouting match.

Pierce told the subcommittee, in essence, that the budget is his story and he's sticking to it.

Chairman Henry B. Gonzalez (D-Tex.) led off the Democrats' response by calling Pierce's statement "so outrageous that it would have to be subject to a process something like the Geneva arms reduction talks, where we'd have to have interpreters on language and the use of language and the distortion of facts."

Gonzalez said he would submit his questions in writing "because obviously, I just react too emotionally to such an egregiously outrageous statement you have dared present us. You're not on the Lehrer-MacNeil show, Mr. Secretary, you're before the subcommittee that is charged with the very responsible job of trying to maintain a national housing policy . . . . "

When Gonzalez continued about Pierce's "outrageously misstated" testimony, the secretary broke in: "Mr. Chairman, I totally disagree with that, and I hope we educate you."

Gonzalez replied that Pierce shouldn't "entertain any hope of educating me," and the confrontation went briskly from there.

When Rep. Mary Rose Oakar (D-Ohio) began to tell Pierce that she was "somewhat astounded at your testimony," Pierce interrupted to ask, "Will you tell me where you're astounded? Maybe I could say something."

"Well, I'd be happy to . . . ," Oakar replied. "I was going to ask you what battle you put up with David Stockman over the budget because you really lost, because the bill gutted . . . ."

"What in my testimony, ma'am?" Pierce broke in.

"I'm asking the questions, Mr. Secretary."

"Oh, all right."

After more wrangling during which Oakar suggested indirectly that Pierce resign, she asked why it had taken HUD two years to begin its housing-voucher program, "which you think is so terrific."

Pierce said regulations required by law were to blame. "In other words, the Congress of the United States gave us a bit of a delay."

"Let me tell you that's not true and you know that," Oakar said.

"No, I don't know that," Pierce shot back.

Oakar then said "I'm told that" Pierce is unwilling to visit projects "unless you get an award and that sort of thing . . . . "

"That's a lie," Pierce replied.

After Oakar, Rep. Bruce F. Vento (D-Minn.) assailed the secretary over "misuse" of an Urban Development Action Grant. That exchange grew so heated that Gonzalez had to interrupt to plead for a reduction in "the decibel level."

After he and Pierce had talked simultaneously for some moments, Rep. Barney Frank (D-Mass.) said, "Mr. Secretary, please listen. I know this is not your favorite thing to do. There are lots of parts of the job you must enjoy -- I wouldn't guess what they were . . . . "

To which Pierce replied, "I'm just trying to give you the facts. You just want to put on the record what you want to say."

"Oh, no sir."

"Well, then let me talk."

"No. I will let you answer questions. I'll be glad to answer questions if you want to ask me at some point."

"I don't want to ask you questions. I just want to answer the ones you asked."

After 3 1/2 hours, the hearing adjourned. Rep. Robert Garcia (D-N.Y.) told Pierce: "History will judge all of us based on our deeds."