It could be something out of Star Wars, but it's not a weapon. It's a laser used as a physician's scalpel, and a doctor who has tested it believes it could help surgery patients recover faster and with less pain.

The new device, approved for general surgery in August by the Food and Drug Administration, is called a contact laser scalpel. It differs from other surgical lasers by allowing more precise application of the intense light that serves as its "blade".The new contact laser is applied directly to tissue, just like the knife of a scalpel or the tips of other ordinary surgical instruments it may someday replace.

The direct contact with tissue gives surgeons a more familiar and intuitive "feel" for what they are doing, said Dr. Vijay Maker, chief of surgery at Grant Hospital in Chicago. Maker has now used the new device in about 70 surgeries.

Similar but non-contact lasers are not approved for the same types of surgery and are not used directly on tissue. Held at a small distance from target tissue,these lasers make it more difficult to control where and how deeply and widely the beam cuts, restricting their use primarily to sealing off and clearing out bolld vessels or zapping tumors in passageways like the stomach, womb and intestinal tract.

The precision of the new instrument allows its use in general surgery like msatectomy, Maker said. The device has also been approved for operations like hysterectomy, removal of the thyroid gland, and hemorrhoid, liver, gallbladder and hernia operations.

"As you start cutting through tissue, you see it doesn't bleed. That's what surgeons have always dreamed of," Maker raved.

"The laser energy that comes out" through the artificial-sapphire tip of the laser scalpel "gives out a very precisely calculated amount of heat that clots blood on the spot, without burning and damaging the vessles--if it's done right," Maker said.

The contact laser uses different tips to deliver different amounts of energy for diffent tasks: to cut tissues, seal off bleeding vessels, vaporize or destroy cells, and gently separate layers of tissues. Maker has found he can dissect breat tissue and surrounding muscles so gently in a mastectomy, "It looks like the muscles have never been touched."

The precision of the new laser sped up the recovery of approximately 20 mastectomy patients on whom Maker used it, getting them out of the hospital in an average of four days, compared to the six recovery days for women getting conventional surgery.

The patients also lost less blood during the procedures than would be expected with conventional surgery. Maker presented his results with the new laser at clinical meetings of the American College of Surgeons in late October.

But best of all, Maker said, the cleaner incisions from the contact laser caused far less pain. "It's the pain that most patients fear," Maker observed.

Half of his patients required no pain killers stronger than Tylenol after their mastectomies, while most women getting conventional surgery have pain so severe it requires narcotics. The physician believes steel scalpels cause more pain because they may leave ragged nerve ends where the laser scalpel cuts cleanly and seals off serves smoothly.

Maker believes the contact laser will offer significant advantages over conventional surgery in excising tumors and infection with less recurrence.

"A major advantage is that it kills cancer cells--you don't drag and spread them all over the place" during surgery, Maker said.

"In tissues infected with bacteria it's the same thing. They can be spread when you try an cut them out, but with the laser, the bugs are dead instantly."

The contact laser is made by Surgical Laser Technologies of Malvern, Pa., and is a type of so-called Nd:YAG laser, which uses the hot, invisible infra-red light produced by excited neodymium and yttrium gases.

The company's vice president for sales and marketing, Robert Kripaitis, said less than one-tenth of 1 percent of general surgeons are trained to use the laser scalpel or are using any laser on a regular basis.

"Surgeons are very conservative people," Maker observed. "For the last 16 centuries they have been cutting with a knife--that's our tool. This hasn't really changed that--they've just made the blade a little sharper."

The company estimates approximately 11 million U. S. surgical procedures yearly, a quarter of them performed by general surgeons, lend themselves to contact laser surgery. A general surgical laser scalpel costs $49,000.

Maker, who is not paid by the company, said he believes the reduction in patients' pain and hospital stays make it worth the price.

:wq NEW YORK - A deadlock between the Bush administration and Congress looms on how to cut the budget deficit.

James C. Miller 3d, until recently President Reagan's director of the Office of Management and Budget and a veteran of budgetary battles, expects the deadlock to last until September, the end of the current fiscal year. If that happens, it will make 1989 a harrowing year for the financial markets.

President-elect George Bush said this week that he would open budget negotiations with Congress on his first day in office but reaffirmed his commitment not to raise taxes.

The Democratic majority in Congress will not take the initiative of proposing a tax increase, which they would expect Bush to veto and which they probably could not override.

They will vote for raising taxes only if Bush takes the initiative and does not try to fix the blame on them.

Without a tax increase, the job of bringing down the budget deficit to $100 billion in 1990, required by the Gramm-Rudman-Hollings law, looks impossible.

Miller believes that Bush, unlike Reagan, would stand still for "sequestering" of excess expenditures, half out of military spending and half out of civilian spending.

This would not displease many conservatives, like Miller, who have long regarded tax cuts and the budget deficit itself as powerful instruments for forcing reductions in the size and role of the government.

If Bush sticks to his no-tax-increase line, as seems probable, the battle over which expenditures to cut is likely to produce the stalemate Miller expects, given the huge size of the cuts required and the differences between Republicans and Democrats over priorities.

The task of negotiating compromises with Congress on spending will fall, first and foremost, to Richard G. Darman, chosen by Bush as his budget director.

Some leading political experts, led by Gerald R. Ford and Jimmy Carter, have been trying to persuade Bush that achieving a budget solution, which they regard as urgent, will be impossible unless both revenues and taxes are on the table.

That was also the conclusion reached this week by a bipartisan group of political and civic leaders, economists, national security experts and others after three days of discussions at the 75th American Assembly in Harriman, N.Y.

"The most urgent economic problem facing the new administration is reducing the deficit in the federal budget," the assembly said.

"This is crucial for stabilizing financial markets throughout the world and setting the United States on a course for regaining equilibrium in its external trade and payments and thereby reducing its heavy and growing dependence on foreign borrowing."

The assembly rejected the contention of Bush and his advisers that the United States can grow out of the deficit simply by expecting tax revenues to grow faster than expenditures, with a "flexible freeze" on spending.

Starting from a low level of unemployment and a high level of capacity utilization, the group argued that economic growth can be expected to slow and revenue growth will slow, too.

Real growth in the years immediately ahead will depend overwhelmingly on productivity growth, with little or no hope of further narrowing the gap between current output and potential output.

Efforts to speed the fully employed economy's expansion would be more likely to breed inflation and add to the nation's trade problem, as Alan Greenspan, chairman of the Federal Reserve Board, has warned.

One could hope to speed real growth by increasing business investment in plant and equipment and in research and development. But the budget deficit, by sapping national savings and raising real interest rates, retards such outlays.

The assembly urged Bush and Congress to act expeditiously on the deficit after a careful review of both revenues and expenditures.

"An agreement on a credible, multi-year deficit reduction package should be negotiated in a collaborative spirit and concluded as quickly as possible," the assembly declared.

But that now looks unlikely.

And that is what is troubling the markets and causing a pullout of Japanese and other foreign investment, putting upward pressure on interest rates and downward pressure on the dollar.

While Wall Street worries about Washington, Washington shrugs off Wall Street and the currency markets.