Social Security Commissioner Dorcas R. Hardy, faced with an outcry over possible changes in disability rules, said Saturday she has rejected the draft proposal that sparked the furor.

She said the draft had "generated inaccurate information and caused undue alarm to the public."She said she remains convinced that the agency's hearings and appeals process needs reform, but the staff-suggested proposal did not meet her criteria of making the system "more equitable, compassionate and efficient."

"I believe that SSA (the Social Security Administration) can do better and have, therefore, rejected it," she said in a four-page statement.

The furor erupted last month when The New York Times reported the Reagan administration was considering restricting the right of Social Security applicants to introduce new evidence upon appeal.

Thirty-five senators sent a letter to President-elect George Bush on Wednesday urging him to repudiate the policy change.

Hardy said her agency "is deeply committed to improving the hearings and appeals process to ensure that claimants receive fair, timely and accurate decisions."