Kennedy Urges Party to Reappraise Policies : Asks Democrats to Curb Enthusiasm for Costly Programs and Dependence on Interest Groups

In an ambitious effort to rechart his party’s course--and alter his own political profile--Massachusetts Sen. Edward M. Kennedy urged fellow Democrats on Friday to curb their tendency to promote high-priced government programs and also to curb their dependence on the support of organized labor and other interest groups.

“We cannot and should not depend on higher tax revenues to roll in and redeem very costly programs,” Kennedy said in an address at Hofstra University in Hempstead, N.Y., at a conference commemorating the presidency of his brother, John F. Kennedy. “Rather, those of us who care about domestic progress must do more with less--and, in fact, some of the measures we should take will save money instead of spending it.”

As part of an apparent effort to reposition himself for a possible presidential candidacy in 1988, Kennedy acknowledged that some worthy federal programs have outlived their usefulness. “The mere existence of a program is no excuse for its perpetuation--whether it is a welfare plan or a weapons system,” he said, according to his text, which was released here.

The 53-year-old senator, regarded as the principal spokesman for traditional Democratic liberalism since the withdrawal from the political scene of Walter F. Mondale, the party’s 1984 presidential nominee, called on Democrats to act in the broad national interest, even if it means disappointing longtime allies.

“We must understand that there is a difference between being a party that cares about labor--and being a labor party,” he said. “There is a difference between being a party that cares about women--and being the women’s party. And we can and we must be a party that cares about minorities without becoming a minority party.”

The address was Kennedy’s first major pronouncement on the state of his party since Mondale’s disastrous defeat last November. It served notice on fellow Democrats that he does not intend to take a back seat in the current debate over the Democratic future.

‘In With Both Feet’

“This puts us into things with both feet,” Kennedy press secretary Bob Mann said. And Mark Siegel, a Democratic political consultant and 1980 Kennedy campaign adviser, said: “It comes close to an announcement of his candidacy.”

The prevailing judgment among Democratic professionals, including some close to Kennedy, is that the senator would like to seek the presidency again in 1988 and will move in that direction. But these observers believe that his final decision will depend on circumstances late next year, particularly the condition of the economy.

In his speech, Kennedy called for merit pay for teachers--an idea generally opposed by the National Education Assn., which has been active in support of Democratic candidates. And he backed income tax simplification, a concept viewed critically by organized labor, the most potent single source of financial support for Democratic office-seekers. Labor fears that such a plan could lead to taxation of fringe and unemployment benefits.

Looking back on his party’s recent troubles, Kennedy suggested that Democrats might have been better off if they had lost the election in 1976, when Jimmy Carter defeated Republican incumbent Gerald R. Ford. If Ford had won, Kennedy asserted, high interest rates, high unemployment, inflation and the energy crisis “would have brought a stunning rebuff to the Republican Party in the 1980 election.”

Criticizes Reagan

Kennedy, who challenged Carter for the Democratic nomination in 1980, did not mention the name of either Carter or Mondale in his text. He criticized President Reagan, who defeated them both, for the “cold unfairness” of his policies but predicted that history would judge that “Ronald Reagan has restored the presidency as a vigorous, purposeful instrument of national leadership.”

Although the thrust of his Hofstra address appeared to mark a sharp break with the public perception of Kennedy as a die-hard and doctrinaire liberal, this is not the first time that he has signaled his willingness to move away from the party’s past.

Early in his primary challenge to President Carter in 1980, Kennedy contended that the Democrats must take positions differing from both Franklin D. Roosevelt’s New Deal and John F. Kennedy’s New Frontier.

But as the campaign developed, Kennedy moved to the left as he sought to sharpen the distinctions between himself and Carter.

His Hofstra address probably will be regarded as an acknowledgement of the impact of the Reagan presidency on his party and of demands for change by a new generation of Democratic leaders.