Google translates it to "I am a citizen of Berlin."
Google translates "I am a jelly doughnut." to "Ich bin ein Geleekrapfen."
They must not like jelly doughnuts.
Those who understand German that were listening to the speech understood what he meant.
But it is still fun to make fun of him for it.
A "Berliner" is not actually a jelly or cream "filled" donut, but rather a pastry with a glazed fruit topping (and quite delicious). (If I could ever master posting pics on here, I'd post one)
When I was stationed in Berlin the Germans would say "Ich bin ein Berliner" to be 'cool'... They loved Reagan over there too (except for the hippies who hid out from the draft in West Berlin [draft exempt city]). When Reagan passed there was some movement to name a square after him - I don't know what the status of that is...