On a Saturday afternoon in La Perla, a soft breeze floats up the stone steps from the sea. Women hang their wash on the balconies of orange and blue houses. Salsa music drifts out of the bar as a group of grease-spattered youths tinker with the engine of a new Toyota.

In the small plaza, Rafael Suarez, 50, is slicing a coconut from one of the overhead palms, passing the moist white meat around on the tip of his machete. "From Washington?" he says with a hearty roar, greeting a visitor. "Tell them we're poor and to send all the money they can." The men around him look up from a domino game, laughing appreciatively.

La Perla, "The Pearl," is one of the most famous slums in the world. Fifteen years ago, sociologist Oscar Lewis used it as a model of the culture of poverty, painting a vivid picture of prostitution, drinking and broken homes amid its dilapidated shacks. To this day, his book, La Vida , brings students here from distant parts to see how the other half lives.

But in this jumble of little houses packed tightly along a few jagged alleys, life isn't so bad these days. No one goes hungry, because more than half of its 1,300 residents receive food stamps. Free medical care is dispensed from a shiny new clinic with three full-time doctors. Concrete homes are replacing wooden shacks. A day-care facility, built with $109,000 of federal and commonwealth funds, is opening opposite the senior citizens' center.

"We live like tourists here: we feel fine," said Suarez, bare-chested under the tropical sun, a diamond filling glinting out of his front tooth. "People here outfox the government. They plat the programs. We try to get everything we can."

Nowhere has the Great Society taken root so deeply as in Puerto Rico. This semi-autonomous colony, a possession of the United States since 1898, is poorer and more densely populated than any state of the union. Federal transfer payments ballooned from $50 million a year in 1969 to $1.7 billion yearly in a decade, as 55 percent of the island's residents became dependent on food stamps. By contrast, 10 percent of Americans nationally are on food stamps and 21 percent of Mississippians, the highest proportion of any state.

Today, the Reagan administration has proposed to cut federal aid to Puerto Rico by about $450 million a year out of $1.7 billion, a move which Gov. Carlos Romero Barcelo calls "an insult to a people who have earned the right to demand equality as American citizens."

The Senate on June 10 voted to cut the island's $1 billion food stamp program by a quarter, despite an effort by Sen. Daniel Patrick Moynihan (D-N.Y.) to trim the cuts. Sen. Jesse Helsm (R-N.C.) and Sen. David H. Ryor (D-Ark.) argued that Puerto Ricans do not pay federal taxes in exchange for such benefits and that the program has created "food stamp chaos," destroying islanders' incentive to work or to grow their own food.

Some Puerto Ricans are making the same arguments, as they contemplate the fact that federal aid makes up a third of the island's gross product. The extraordinary dependence on the American federal government has changed life here profoundly -- and in ways that Puerto Ricans across the political and economic spectrum find deeply troubling.

"It's slavery," said Victor Agrait, head of Mission Industrial, a church-sponsored group of social activists. "In some aspects Puerto Rico is better off than other Caribbean islands. But whatever we have is artificially created. If it weren't for food stamps our whole economy would collapse."

Economist Jaime Santiago, a Harvard Ph.D. and a former budget bureau director here, notes that participation in the labor force dropped in the last three decades from 53 percent to 43 percent, one of the lowest rates in the world.

"I remember 25 years ago people here wanted to work hard," he said. "But when we started becoming dependent on federal funds, people started losing that. Now we are begging. A janitor earns $400. But he can get $350 in food stamps and other welfare payments. So why should he work? People know it pays to be idle."

Food stamps here have become a black market currency, used to buy liquor, dry goods and other prohibited items. Police have discovered caches of stamps in drug and gambling raids.

Critics charge that the program fostered the consumerism that has overwhelmed Puerto Rico, contributing to a change in diet as islanders flock to supermarkets for corn flakes and diet sodas, rather than growing their own plantains and beans. Food prices here increased dramatically after the introduction of the stamps in 1975. Farmers can't find enough workers to pick coffee or oranges at the U.s. minimum wage.

However, with 30-to-40 percent of the population unemployed or having given up looking for work, and a per capita income less than half that of the United States, it is also argued that welfare programs have prevented divil disorder and avoided great misery here.

"Food stamps are the most significant social adjustment activity in the history of mankind," Gov. Romero said in an interview. "People have struggled against hunger since the beginning of mankind. This is the first nation in the world to guarantee a decent diet."

Gerardo Malave, a 50-year-old security guard lounging in La Perla's plaza that Saturday, is paid $580 a month. Until four months ago, he had never received food stamps, but so many of his friends did that he decided to apply. Now he gets $54 worth a month. "I don't think I need it much to be sincere," he said, grinning sheepishly. "But if others take them, I will too."

Malave, who lives in the same house he was born in, sat under the palm trees contentedly drinking beer. "Some people are ashamed to say they are from here," he said. "But I've always felt proud to live in La Perla."

Portions of Lewis's book have been read to Malave by graduate students who have come to study the community. "It was fiction," he said. "Lewis brought kids from the university to do his research. They took the local gossip and made a book out of it."

The community once sought out a lawyer to sue Lewis for slander, said Malave, then president of the neighborhood council, but the author died just before the action was to be filed. "He said the people were prostitutes and drug addicts," Malave said. "But prostitutes disappeared here in the Second World War. If the girls did it, they did it for fun, not for money. We do have drug problems, but they are people who come from outside."

Suarez, a longshoreman and longtime resident, is equally offended. "If Lewis comes here we'll cut him into little pieces and throw him to the sharks," he chimed in.

La Perla is a close-knit community, and a stranger walking through its narrow streets is scrutinized. One young woman, sucking at a papaya on the sidewalk, urged outsiders to leave for their own safety -- a North American with a camera had recently been assaulted here. But another resident, a portly older woman standing near "Disco Flippers," the pinball arcade, was happy to give a tour.

Dignora Perez, 53, lives off food stamps and an occasional job as a cleaning lady, and she is happier than when she worked in a shoe factory in New York. "I open my window onto the balcony at night over the ocean and I put on the television," she said, walking briskly along the garbage-strewn beach. "The city is cleaning this up and building a new road. In the summer we fish and the young people ride surfboards."

On the other side of the neighborhood, where the ancient walls of San Juan's 15th century fort loom over La Perla's green tarpaper roofs, Alfonso Santiago, thin and wrinkled, but spry for his 81 years, sells sodas and cigarettes from his window on a four-foot wide alley. Every morning he wakes at 6 to ring the church bells. It is one of the curiosities of La Perla that, despite its reputation, the bountiful graffiti on walls and abandoned houses is not sexual, but religious. "Christ is the Lord," reads one huge sin splattered in phosphorescent paint along the main street.

Santiago, who said he rarely makes more than $5 a day at his store, gets $140 in Social Security and $30 in food stamps a month. His son wants him to come live with him in Levittown, a suburb here, but Santiago said he's staying in La Perla. "I talk with everybody here," he explained. "Everybody knows me."

La Perla's softball team went to Santo Domingo this year and the baseball players were shocked at the poverty. The spent money feeding urchins and came back with empty suitcases after giving away their clothes, according to Miguel Ramirez, a team member.

"Harlem and Georgia's Tobacco Road have more social problems than La Perla," said Anthony Velez, a doctor who has practiced here 10 years. "The way of life has changed here. Now everyone has a TV and a refrigerator. They have gone to the states at one time or another. They are thinking of higher education, which never would have entered their mind before."

The group that has pushed most fervently for more federal aid, Gov. Romero's New Progressive Party, is also the party that favors statehood for the island. "Statehood is for the poor" was the slogan that helped win Romero the governorship. During his term, Romero has taken out frequent ads in the Wall Street Journal and other publications touting the productivity of the workers of Puerto Rico, U.S.A." The children of today's food stamp recipients, he says, will want to improve their lot, and work harder to buy more consumer goods.

However, Puerto Ricans who favor indepedence -- only 5.8 percent in the last election -- are fond of saying that if the British had passed out food stamps, there would still be 13 colonies. The federal programs, they say, have bound Puerto Rico to the United States more effectively than any political yoke.

"Food stamps are a social and ethical disaster," said Ruben Berrios, head of the Independence Party, who advocates phasing out the program over 10 years. "The mentality of the ghetto has started to develop in the whole land. There is nobody in the world who, if offered food coupons instead of working, will not take food coupons. It is a medication for a superdeveloped nation that has been applied to us. It is like penicillin to a baby -- you need small doses."

Perhaps partly out of jealousy at its relative prosperity, Puerto Rico is ridiculed throughout Latin America as the only Spanish-speaking territory that is still a colony, albeit one that calls itself "a free associated state" and chooses in open elections to remain part of the United States.

"O pobre Puerto Rico, Puerto Pobre" -- O pool Rich Port, Poor Port -- goes a verse of the famous poet Pablo Neruda, in a play on the island's name, which means rich port in Spanish:

Nailed with the naisl of torment

by your traitorous sons who hammer

your bones on a cross of bloody dollars. .

In La Perla, people are very conscious of the Yankee dollar, but the mood, rather than shame, is more apt to be cocky good humor and acceptance of Uncle Sam's beneficence. At the senior citizens' center, a toothless elderly man, Juan Varga, lights up at the chance to tell the latest joke. "You're from Washington?" he says. "Then you must know 'el barbero' -- the barber." He pauses. "President Reagan," he adds. "The one who cuts." Puerto Rico at a Glance

Puerto Rico, discovered by Columbus in his second voyage to the New World in 1493 and conquered by the Spaniards under Ponce de Leon in 1508, was taken over by the United States in 1898, after the Spanish-American War. Its military government was replaced by a civil government in 1900, and its citizens were made American citizens in 1917. The island has been self-governing since 1952, and a United Nations ruling in 1953 declared it no longer a colony. It became an estabo libre asociado, or "free associated state."

The island covers an area of 3,435 square miles and is populated by slightly more than 3.1 million people. Like the District of Columbia, Puerto Rico is represented in the House of Representatives by an elected, but novoting, delegate.