Scald milk; let cool to lukewarm (105° to 115°). Dissolve yeast and 1 tablespoon sugar in warm milk in a large mixing bowl, stirring well. Let stand 5 minutes or until bubbly.
Add 1 3/4 cups flour, mixing until smooth. Cover and let rise in a warm place (85°), free from drafts, 1 1/2 hours or until doubled in bulk.
Cream butter; gradually add 1/3 cup sugar, beating well. Add egg and salt, mixing well. Stir in raisins, yeast mixture, and enough remaining flour to make a soft dough.
Turn dough out onto a floured surface. Knead 8 minutes or until smooth and elastic. Place dough in a greased bowl, turning to grease top. Cover and repeat rising procedure 1 hour or until doubled in bulk. Punch dough down. Turn out onto a lightly floured surface. Cover; let rest 10 minutes.
Divide dough into 18 pieces; shape into balls, and place 2 inches apart on greased baking sheets. Cover and repeat rising procedure 1 hour or until doubled in bulk.
Using a sharp knife, cut a shallow cross on top of each bun. Combine egg and water, stirring well; brush over each bun. Bake at 400° for 8 minutes or until golden brown; cool on wire racks.
Combine powdered sugar and 1 tablespoon milk; stir until smooth. Pipe icing into crossshaped indentation on each bun.