President Reagan's Strategic Defense Initiative (SDI) narrowly escaped a major setback in the Senate yesterday when Vice President Bush broke a 50-to-50 tie vote in favor of a $1 billion funding increase for the controversial "Star Wars" program next year.

Less than a week ago, the Senate voted to ban SDI testing and development in violation of the traditional narrow interpretation of the 1972 Antiballistic Missile (ABM) Treaty.

To fund research for the program next year, Reagan had proposed an increase of $2.2 billion, which would raise the current funding level of $3.5 billion to $5.7 billion. The Senate Armed Services Committee voted to cut his proposal to $4.5 billion.

Bush's tie-breaking vote yesterday had the effect of sustaining the committee's proposal against an assault from a bipartisan group of senators who wanted to reduce it to $3.7 billion, or just enough to cover the costs of inflation.

Since the House has voted to cut the program to $3.1 billion, the Senate action raises the possibility of a congressional compromise that would allow at least some growth in SDI funding for fiscal 1988.

It was Bush's first tie-breaking vote of the year and his last since August 1986, when he broke a tie in favor of proceeding with production of a chemical bomb, known as the Big Eye.

The Senate is in its second week of work on a $303 billion defense authorization bill, which has turned into a forum for debate over major differences on arms control between the Republican White House and Democratic-controlled Congress. SDI has been the major point of contention.

Divisions on the pace and scope of SDI research transcended party lines, with 13 Democrats joining 37 Republicans in supporting $4.5 billion for the program and nine Republicans joining 41 Democrats in favor of cutting it to $3.7 billion. Virginia senators voted for the higher figure; Maryland senators supported the lower one.

It was the second year in a row that the Senate split down the middle over SDI spending. Last year, when Republicans were in control of the chamber, the vote was 50 to 49 in favor of a substantial increase for the program.

During yesterday's debate, SDI critics charged that the program was growing so fast that it was squeezing out other more important defense-related research. SDI defenders contended that the proposed cutbacks were aimed at killing the entire strategic defense effort.

SDI has become a "budgetary rogue elephant" threatening to "trample our other military programs," argued Sen. William Proxmire (D-Wis.), who joined Sen. J. Bennett Johnston (D-La.) in pushing for the reduced spending level.

Proxmire characterized SDI as a program with "vague and constantly changing" goals that was "driven by hype . . . and political ideology." Johnston, noting that SDI defenders have hailed it as a bargaining chip to force Soviet concessions on strategic weaponry, said the bargaining-chip argument has become "the last refuge of the big spenders."

In opposing the Johnston-Proxmire cutback proposal, Sen. Dan Quayle (R-Ind.) described it as a "nice quiet, polite way to put SDI into the grave. . . . What we're doing here is digging a grave for SDI . . . with a smile on our face."

Quayle said a $3.7 billion allocation would assure that SDI remains a research program, stopping short of the testing, development and deployment that would be necessary to establish it as a space-based defense system.

Without adequate research, the United States cannot make a valid decision about whether to proceed with other phases of the program, Sen. Pete Wilson (R-Calif.) said.

In related action, the Senate, reaffirming a position it has taken in previous years, voted 51 to 47 against extending the current moratorium on antisatellite weapons testing against fixed objects in space. The existing testing moratorium, which has been in effect for two years, has previously been approved as part of an overall defense compromise at the insistence of the House. The House earlier this year proposed continuation of the moratorium for fiscal 1988.