The sleeping man is a homeless man in Home Alone 2: Lost in New York. He is seen laying up against the bottom of the tree in a spot on the sidewalk. When Kevin is walking down the sidewalk in Central Park, another man walks past Kevin and bumps into him, causing Kevin to accidentally wake the sleeping man. When the man wakes up and sees Kevin, he says, "Watch it, kid!" before laughing.
Unable to think of a comeback (witty or not), Kevin walks away down the sidewalk while the man keeps laughing, where he encounters two prostitutes.
He is played by the late Leonard Tepper.