WASHINGTON -- In 1981, when officials in the Reagan administration were preparing their first budget, they came up $44 billion short of the spending cuts they needed. So David A. Stockman, the budget director, invented what he called the "magic asterisk." The asterisk in the budget table stood for "future savings to be identified."
Neither Mr. Stockman nor anyone else had the foggiest notion where these savings would be found, and, of course, they never materialized.
That was the beginning of a Republican budget policy grounded in gimmicks.
The Reagan and Bush administrations used unreasonably favorable economic forecasts ("rosy scenarios," they were called) to predict that the deficit would fall. The economy never did so well as they predicted, and the deficit continued to rise.
The Gramm-Rudman law was supposed to require automatic spending cuts whenever the deficit exceeded specified levels. But whenever the screws got tight enough to pinch, the law was changed, so the cuts never had to be implemented.
George Bush ran for president in 1988 promising a "flexible freeze," without ever saying what would be frozen. Republicans in Congress repeatedly advocated ceilings on entitlement spending, without saying what would be done to stay under the ceiling.
But this year things have been different. Every dime the Republicans want to cut has been identified, the howls from those affected notwithstanding.
Depending on how the bill is finally written, said Stanley E. Collender of the accounting firm Price Waterhouse, "a look-back sequester could be pretty much the same as a magic asterisk."
This is the situation:
Under the budget blueprint Congress approved in June, $270 billion worth of savings must be found in the Medicare program over the next seven years. The budget writers picked that number for no reason other than that it made the overall budget come out balanced.
When health policy experts began preparing the Medicare legislation, they figured the maximum amount they could possibly save by reducing payments to doctors, hospitals, laboratories and other health care providers. Then they calculated by how much they dared raise the monthly premiums that Medicare beneficiaries pay for coverage.
At this point, they ended up well short of $270 billion. Somehow -- the details of the plans have not been made public -- the Senate staff may have managed to come up with further, identifiable savings that bring the total to $270 billion. That may be because Republican senators are less wedded than House Speaker Newt Gingrich to a tax cut.
If Medicare savings do not materialize, the senators would probably be willing to scrap part of the $245 billion tax cut in the budget blueprint.
But as of Thursday, the House drafters were still as much as $80 billion shy of the Medicare savings they need.
The representatives say they will plug the gap by inducing retirees and others on Medicare to move into health maintenance organizations, take out medical savings accounts or otherwise opt voluntarily for less expensive insurance coverage. The representatives call this expanding the choices available to those on Medicare.
Most experts in the cost of health care doubt that such savings can be found in the next seven years from persuading Medicare recipients to change coverage.
In fact, many experts believe that the steps the Republicans are proposing, while perhaps cost-effective eventually, would be more expensive in the short term.
So the Congressional Budget Office, the arbiter of what actually constitutes saving money, found that the plan of the Republicans in the House still fell short of $270 billion in savings.
This is when the idea of a fail-safe mechanism called a "look-back sequester" came into being. Under this notion, officials would look back at the end of each year to see if movement into HMOs and the other inducements had actually saved as much as had been hoped under the budget.
If they had not, then further steps would automatically be taken in the following year (a "sequester," in budget language) to make up the difference.
Here's the rub: So far, the Republicans have not said precisely what those further steps would be. In one of the latest versions, for instance, the secretary of health and human services would simply be instructed to find the savings.
Without specifics about what would be cut and by how much, the Congressional Budget Office still says the plan does not add up.
A Republican staff member involved in the process described the lawmakers involved this way:
"They've gotten weak-kneed. They create this world of choice, which would be fine. But then they duck on the details because they don't want anyone to accuse them of touching anyone's benefits."
Robert D. Reischauer, former director of the budget office and now a senior fellow at the Brookings Institution, said this of the Republicans: "The more specific and the less flexible they are, the more what they are proposing will look like an actual cut and, therefore, the more hollering you will hear from those affected, and the more politically unpalatable it will be."
All this may be resolved in the next few days. Rep. John R. Kasich of Ohio, the ardent Republican budget-cutter who is chairman of the House Budget Committee, has been leaning hard on Medicare-writers to come up with an honest accounting of Medicare savings.
If they do, this much is clear: They will have to say specifically who would stand to lose what in which circumstances -- be they doctors, hospitals or elderly patients.