The three-martini lunch is on the endangered-species list once again.
In one of the final amendments to the tax bill yesterday, the Senate voted to cut the corporate tax deduction on expense-account lunches to 50 percent, leaving half the cost to be borne by the diner's employer--or by the diner.
With the 4:25 a.m. vote, a Republican-dominated Senate had made the most direct assault on expense-account eating since Jimmy Carter made--and quickly withdrew--a similar proposal in 1978.
And, although some observers cautioned that the dawn raid was a political ploy that would die in the House, restaurateurs and patrons in Washington worried over lunch yesterday that, if the proposal became law, it would undermine the city's noontime tradition of wheeling and dealing.
"That's horrible. You know what that will do to restaurants?" exclaimed a lawyer about to eat lunch (on his client's expense account) at The Prime Rib on K Street. "It will be devastating."
"I've scrambled my eggs and curdled my cream thinking about this," said Mo Sussman, co-owner of Joe and Mo's on Connecticut Avenue. "Of course, this is going to damage my business. I think the ramifications are very serious."
Many customers predicted that the proposed law would lead to a crackdown by employers on the frequency of expense-account meals. "It will still go on; it's just that it's going to have to be under tighter controls," said Steve Feldstein, who works for Western Union and was having an expense account lunch at The Prime Rib. "Some adjustment will have to be made--some limitation on the number of lunches through the month."
"A lot will depend on the philosophy of the individual firm, what they will allow their people to do," said a diner at Mel Krupin's on Connecticut Avenue.
But others said that the importance of expense-account lunches as venues for the transaction of business would prevent their demise. "I have to eat lunch whether it's deductible or not," said lawyer Stan Anderson as he entered Romeo and Juliet on K Street. "Most of my lunches are working lunches, whether they're deducted full or 50 percent."
"We must conduct business the same way as we've done before," said James Haight, who, although he is president of the Mr. Smith's chain of restaurants in the Washington area, was lunching at The Prime Rib.
"I'm an incurable optimist," Haight admitted. "It will hurt at first, but I think we'll get over it."
"They're here to stay, they're going to come here to do business," said Pat Haley, an owner of Gary's at 1800 M St. NW. "It won't hurt us much."
Mel Krupin, who owns the restaurant bearing his name, said the Senate's move would be a double blow to the restaurant industry, because business already has been softened by the recession. "The three-martini lunch ended with the recession," he said, estimating, however, that about 50 percent of his lunch business is on expense-account tabs.
One of Krupin's customers, former Virginia governor Linwood Holton, predicted that the fuss over the Senate action would be short-lived. "It won't pass the Congress," he said, adding that Sen. Robert Dole (R-Kan.) had pushed the bill through to pressure the restaurant industry to accept a bill that would put a withholding tax on employe tips.
If the industry accepts the tips measure, the three-martini-lunch deduction will be spared, he predicted. "This is just a trading proposition," Holton said. "It goes on every day."
And some people having lunch at pricey restaurants yesterday seemed unperturbed by the controversy. "Mine is on me," said one diner. "I sure wish it was an expense account."
"That did happen? I'm going to have to think that one over," said a customer at Romeo and Juliet. "But I'm a guest today."