LEAD: President Reagan proposes increases for the Education Department, the air traffic control system and the Federal crackdown on drug trafficking and white-collar crime as part of his $1.1 trillion budget for 1989, according to confidential budget documents.

President Reagan proposes increases for the Education Department, the air traffic control system and the Federal crackdown on drug trafficking and white-collar crime as part of his $1.1 trillion budget for 1989, according to confidential budget documents.

The proposed increase for the Education Department in the fiscal year 1989, which begins Oct. 1, represents a turnabout for the Reagan Administration, whose efforts to cut Federal spending on education have repeatedly been rebuffed by Congress. For 1989 it is proposing spending of $20.3 billion, up from the $18.4 billion education budget this year, according to budget documents obtained by The Associated Press. An Effort to Minimize Conflict

The proposal includes spending $300 million additional...