Pausing the other day to chat with Richard and Nell Ellis at their flower and jewelry shop in this small west Georgia textile town, Rep. Newt Gingrich (R-Ga.) asked the couple what they thought of President Reagan.

"He's busted the small businessman and the farmer," grumbled Ellis, who went on to tell of his $57,000 business loss, $38,000 of it in interest costs, last year.

But would he then have Reagan change his ways, Gingrich asked Ellis. "No, I think these things have to be done," responded Ellis. "I just wish it would get over with before we're all killed."

A day later, as Gingrich was campaigning in a blue-collar suburb near the Atlanta airport, Allen Langley, a trustee of Machinists' Local 1690, complained that Reagan had failed to deliver on jobs.

But, asked about the president's popularity, he responded, "You take this union hall. A lot of the guys voted for him and probably would again."

As Gingrich sees it, Reagan still has a powerful hold on the people of Georgia's 6th Congressional District, a bastion of southern Democratic conservatism that stretches from the outskirts of Atlanta to the Alabama border. They like his old-timey political values, and, with their relatively diversified economy, they have been spared some of the more acute economic pain that has struck states to the north and west.

There is an "amazing tolerance of hard choices," Gingrich said, and he believes that gives Reagan continuing latitude to keep pushing his program.

But that mandate is not without its limits, as Gingrich, the brash young college professor who is seeking a third term as Georgia's only Republican member of the House, exemplifies.

He broke with Reagan in opposing the administration-backed tax increase last month, and has served notice that his support for presidential budgets cannot be counted on in the future unless Reagan cracks down on what Gingrich -- who describes himself as a "cheap hawk" -- regards as excessive defense spending.

Gingrich appears to have suffered little for his break with Reagan over taxes back home in Georgia, where an alleged softness toward tax increases helped upset the Democratic gubernatorial frontrunner in a primary election only last week. A frail old man accosted Gingrich at the meat counter of a supermarket here to congratulate him for trying to "stop Brother Reagan from putting all those taxes on us poor folks." Gingrich smiled appreciatively.

What is more suprising is that his call for "reform" of the Pentagon and its spending habits seems to touch a positive chord in this traditionally hawkish territory. When he asked a group of Douglas County campaign advisers if they thought "the Pentagon needs an overhaul," nearly every hand went up.

For all the unpopularity of the tax increase in Gingrich's district, however, Reagan does not appear to have suffered much on that score either. A tax increase may not be popular, but "people want their presidents to make decisions and then stand by them," said state Sen. Nathan Dean, a Democrat.

So Gingrich appears to have the best of all political worlds as he approaches his fall campaign against state Rep. Jim Woods, who has made little headway to date. He is linked to a popular president and the homefolks will tolerate occasional apostasy in what they regard as a good cause.

But he worries aloud among his supporters about the possibility of more economic bad news, which he fears could cause a Democratic resurgence, especially in a district like his that has a long history of voting Democratic.

And he carries his campaign insurance on the rear bumper of his car, which has two stickers, one with his name and the other reading "Democrats for Newt Gingrich."