"This morning, " said President Ronald Regan, "Sen. Laxalt tried to give me a big, green button with 'Honorary Irishman' printed on it. I told that son of the Basques, 'I'm not honorary -- I am,'"

It was lunchtime on St. Patricks's Day at the Irish ambassador's residence, and the president had just been handed an ornate, handwritten scroll tracing his Irish ancestry. He was delighted not only at this rebuttal to such doubters as Paul Laxalt (R-Nev.) but for the chance to get in touch with his roots.

"My father was orphaned at the age of 6," Regan said, "and I grew up not knowing or hearing anything of my family tree. I understand that the Regans and the Regans are the same family. The other day, I told Secretary of the Treasury [Donald T.] Regan that some branches of the family just can't handle all those letters. But later I discovered that the Regans are generally professors and administrators and members of the educated class, and the Regans are members of the laboring class."

Regan drew applause with the announcement that he had nominated William McCann as ambassador to Ireland, and drew laughter from the 40 guests with one of his father's favorite lines about the Irish in American: "The Irish built the jails and then filled them."

"He used to sound pleased when he said that, " Regan added. "I didn't understand at first, until I realized he was talking about the high proportion of Irishmen in the policy."

The president walked in decked out in a red necktie and green carnation, to the tune of a Tipperary march played on the Irish pipes -- a less vigorous and more melodic instrument than the more familiar Scottish bagpipes. The piper, Tomas O'Canainn, later introduced by Irish Ambassador Sean Donlon as the leading performer on the instrument, provided music at the luncheon. Before the exchange of toasts with Irish coffee, Donlon's daughter Monica sang what she called "a typical lighthearted love song about a man who is in love with a beautiful, red-haired girl but loses her to another."

Regan, glowing with Hibernitude, gave her a jar of green jelly beans and told her, "When the Irish sing a song, all who hear it wish they were Irish."

From Donlon and Ireland's Finance Minister Gene Fitzgerald, Regan received not only the scroll but an Irish-made china basket and, for First Lady Nancy Regan, a bowl made of Irish silver with Celtic designs. America held a clear balance of trade on this transaction, but Fitzgerald hinted broadly that he will try to get a return on the investment.

After hailing everyone present as "Fellow Irishmen" -- including the Netherlands ambassador who was made an honorary Irishman on the spot -- Fitzgerald talked about the enormous progress made by the Irish in the United States, owing to "the great traditions of democracy, generosity and freedom."

Then he began invoking the Irish ancestry of the president and members of his cabinet: "The secretary of state, I understand, has Murphys on his mother's side, " he said. "I intend to explore that relationship further this afternoon." He added that Ireland is a bastion of free enterprise and "we are glad to provide conditions in which the European operations of American firms can flourish more profitably."

The small and predominantly male guest list was drawn from such predominantly male areas as the Cabinet, diplomatic corps, clergy, news media and congressional leadership, as well as representatives of major Irish American organizations. As happens frequently when a critical mass of Irish males are enclosed in one room, the atmosphere was heavily political. "Well," said Sen. Edward M. Kennedy (D.-Mass.), shaking the hand of Ambassador-designate McCann, "you have at least one vote for confirmation."

With Speaker of the House Thomas P. ("Tip") O'Neill, McCann fell into the traditional pastime of trading names of friends, relatives and home towns. "Which Mc Canns do you belong to?" asked O'Neill. "I'm from Lowell, " said McCann. "I live down in New Jersey, now. I have a life-insurance company there: Foundation Life."

It turned out, as it almost always does when Irish politicians gather, that McCann and O'Neill were sort of related: McCann's father-in-law had played in the same high school band with O'Neill. "He said to tell you he was the big, fat kid who used to play in the band, " McCann said. O'Neill registered instant recognition.

Ambassador Donlon, passing by, paused to say, "Mr. Speaker, L like your tie." O'Neill's bright green tie was held by a shamrock tie clip and decorated with pictures of leprechauns. "The leprechaun works in my office," said O'Neill, "and it's wonderful. The walls have ears when a leprechaun's aroung. People ask me, 'How did you know that?' and I say, 'The leprechaun told me.' "

Irish embassy officials said the event marked the first time an American president had visited the Irish Embassy on St. Patrick's Day.

"I invited him and he accepted. It was as simple as that, " Donlon said. "I wanted the occasion to have dignity with informality. I hope it did."

The Regan family's Irish origins have been traced in a document prepared by the Debrette Ancestry service. The study was distributed at the luncheon by the Irish Embassy. Debrette found a likely Regan ancestor in "an O'Regan family gravestone at Ballyporeen, " where a Michael O'Regan's baptism in 1824 is recorded. The president's ancestors apparently left for America during the famine of 1845-'49 from a town land of 229 acres called Doolis, which is now farm land, "some two miles west of Ballyporeen village and up a small road."