WITH ITS TITLE inspired by Jonathan Swift, The Floating Island sets sail in what may well be the most dangerous literary vessel of them all -- the satirical novel. It can be reported with no little relief that it reaches port safely.

Garrett Epps' story takes place in Washington during the death throes of what many professional thumbsuckers are now predicting will have been the last Democratic administration until at least the 21st century. After reading this funny, sad, hyperbolic novel, you might conclude that the thumbsuckers are absolutely right.

For this is a twisted tale of betrayal and false friends and uncommon incompetence. It is also a witty study of the political savages who once dwelt in the Washington rain forest and who, from last reports, dwell there still.

The protagonist is a diffident young lawyer, Gerald Nash, late of the Equine Defense Fund. When we meet him he is a special assistant to the Assistant Secretary for Evaluation, Training and Morale in a bureaucratic fiefdom that Epps describes only as "the New department." Nash shares a co-op apartment with Willys Handleman, a free- lance journalist who has boned up on the Balkans, thus virtually monopolizing a profitable geographic specialty that many Americans once counted on Eric Ambler to guide them through.

There is also a venal congressman who is manipulated by the usual opportunistic administrative assistant. An aw-shucks White House political operative goes by the name of Toad Earnshaw while a fading do-gooder, Margaret Luck, does her good works for something called "The Coalition of Industrial Alternatives." And for spice there are a couple of weird cult-like outfits all themselves the Temple of Ray and the Toiling Masses League.

Into this morass stumbles Bob "Three- Finger" Zardovsky, an ex-minor-league baseball great, now bent on securing a $250,000 federal grant for his ailing Peoples Lumber Mill Co-op that is located somewhere out in the farther reaches of the Pacific Northwest at a place called Gouge Eye. It is up to our hero's New department to approve or reject Zardovsky's grant.

But suddenly the presidential election is upon the land, and Gerald Nash is snatched from the New department to head up the re- election effort in the Pacific Northwest, where he has never once set foot. The titular head of the incumbent president's campaign is a senile former ambassador whose advice may well have been taken for political gospel up until as late as last November: "There are a few simple rules. Call in the union leaders and promise to repeal the Taft-Hartley Act. Call in the corporate leaders and promise not to. Remind the middle classes that we saved them from the Depression and won the war. Give out two-dollar bills in the colored neighborhoods. There should be no difficulty."

THROUGH silly exaggeration and a cultivated air of detachment, Epps almost makes us believe the terrible events he describes, which is the mark of successful satire. He is at his best when mapping the political winds of change that blow bureaucrats, politicians and journals of opinion from left to right and -- who knows? -- perhaps back again.

There is also a couple of quirky romances that oddly enough do nothing to slow the novel's pace. One is between Three-Finger Zardovsky and the professional do-gooder, Margaret Luck. The other and major one is between the protagonist, Gerald Nash, and a female television correspondent who is network bound. That the TV correspondent does not emerge as the heroine should come as no surprise.

Epps has a fine descriptive eye, and his dialogue is both tart and true. Best of all, he hs a nice sense of the ridiculous, particularly when it threatens to become the norm. But that, of course, is the satirist's trade -- to make the ridiculous seem normal. And when a writer is able to bring it off, it is splendid. Fortunately, The Floating Island is splendid most of the time.