HELLO, working welfare mothers and other poor persons. I am reporting to you live from the Watergate complex in Washington, the physical as well as spiritual and intellectual home of much of the Reagan administration. I am here to explain Reagan Economics to you.

I am standing before the Jean-Louis restaurant where the Reagan people frequently eat and where, from time to time, they throw parties for one another. Today's menu, working welfare mothers (WWMs) and other poor persons (PPs), features poached bay scallops in tomato butter, and fresh filet of salmon with saffron veggies, served with Visan White (that's a wine, WFs and PPs), a little veal (sauteed) and some other delicacies. All of this could be had for just $30 per person. At dinner, this place could cost $100 a person.

You may wonder, WWMs and other PPs, how a place that charges these prices stays in business. Easy. It's subsidized by the government. The people who are eating here even as we are talking are probably going to put the bill on their expense accounts. This means the lunch is free for them and a tax deductible expense for their companies. In this way, the government subsidizes the lunch.

I know what you want to know. You want to know how many times a person can do that. I know why you are asking that question. You're asking because the government just lowered its subsidy to welfare mothers for child care. Under the new guidelines, the amount of child care that can be deducted from income has been reduced even though you may need the child care so you can work and get off of welfare. Tough nuggies, WWMs.

This principle does not apply, though, to business lunches or, for that matter, to any business expense. You can deduct and deduct and deduct all you want and the government will be happy to keep you eating in the style to which you are accustomed.

Let's move along now, WWMs and other PPs. We are now at the Watergate Chef, a very fancy deli. Notice that the shrimp salad is $4 for a quarter of a pound and the petrossian salmon is $7.25 a quarter of a pound and a bottle of Perrier Water (Yes, WWMs and PPs, water!) is $1. Pimento-flavored oil is $7.50 for 15 ounces and marinated beef salad is $2.25 for quarter of a pound. People who buy delicacies like this usually do so for a party. And very often, they deduct the cost of the party because they say the entertainment is for business purposes. They also tip the person who delivers the food. This is an example of the trickle-down theory of economics actually working. Sometimes as much as a buck or two trickles down.

Okay. Here we are at the Watergate Wine and Beverage Shop. A bottle of Grand Vin Chateau Latour (1967) cost $59.95. This is the kind of wine favored by the Reagan crowd, but for them the cost is really half that. If they use it for business entertaining, they get to deduct it. This represents a savings of at least 50 per cent. Drink up.

There are lots of things to buy here at the Watergate. Just walk along with me. A tweed skirt at Saks of the Watergate is $175 and blue pants that look like pajamas cost $250. In white, they're $275. At the Watergate Men's Shop, they show silk shirts in the window, and Collette of the Watergate is showing blouses for $185. Gucci has a little purse for $275, a men's blazer for $450 and suitcase for $550. The antique shop nearby has an 18th century chair for $1,250. If you put it in your office, you can depreciate it.

You WWMs and other PPs must find it hard to believe that there are people who can afford to buy such items. You might find it even harder to believe that these are the people who are going to benefit the most from the Reagan administration tax programs. The people who are going to lose are the poor. That's you, WWMs and other PPs. That's why things are going to get tougher. That's why the school lunch program is going to be restricted and the lunches themselves shrunk. That's why you WWMs are only go to be allowed $1,000 in household assets before you get your payments yanked and reduced credits for for child care and transportation. The money has to come from somewhere.

If I were you, WWMs and other PPs, I would protest. Who knows, maybe someone in the administration will hear you and take you to lunch.

It's deductible.