The Senate hit a major snag yesterday in its work on the tax bill: it tacked on so many extra tax breaks that it ran out of money for any new ones under the fiscal 1979 budget ceiling.
After another round of tax giveaways, Sen. Edmund S. Muskie (D-Maine), chairman of the Senate Budget Committee, said it had bloated the tax bill to the limit and could not approve further breaks without breaching the ceiling.
With $5.8 billion in new tax breaks added late Friday, the bill now totals more than $30 billion - more than $10 billion above what President Carter has requested. The figure reflect the cost for a full calendar year.
However, on a fiscal-year basis, the way the government's budget accounts are kept, the measure would drain $21.9 billion from treasury revenues - almost exactly the limit for tax legislation in fiscal 1979 established in the budget resolution.
That means that any new proposals for tax breaks may be challenged as out of order. And unless the bill is trimmed sharply in conference, the Senate may not pass other tax legislation, such as the energy tax bill.
Meanwhile, the Senate defeated a scaled-back version of Carter's proposal to limit deductions for the so-called "three-martini lunch" - hooting it down by an overwhelming 49 to 9.
The measure would have raised $600 million in new revenues, allowing more room in the congressional budget for additional tax breaks. The provision is a key part of Carter's tax "reform" plan.
The brush against the congressional budget ceiling came on a relatively minor proposal to exempt vechiles used on farms form highway user taxes - a provision that ordinarily would have cost $15 million.
However, the Senate had only $6 million left before bumping into the budget limit. The problem was solved by postponing the effective date of the exemption to June 1, trimming the fiscal-year cost to $6 million.
Sen. Russell B. Long (D-La), chairman of the Senate Finance Committee warned senators at one point that "we are breaking the bank."
The Senate also passed a series of narrow-interest provisions, including an amendment that would subject foreigners who buy U.S. farm land as an investment to U.S. income taxes on capital gains, or profits they make from selling the property. The proposal would be phased in over five years.
The Senate also approved proposals to grant extra time to members of the Gallo wine family to pay estate taxes and to exempt Maryland and North Carolina state-chartered savings and loan insurance agencies from taxation.
However, it postponed all further work on the major provisions of the tax bill until late tomorrow, when it is scheduled to vote on a series of cloture provisions that would prohibit further narrow-interest proposals.
Majority Leader Robert C. Byrd (D-W.Va.) led the move to close off debate and get on with the major sections of the bill. Byrd told the Senate late yesterday, "We're getting nowhere and not even fast."
The developments came after the Senate spent most of the day bogged down in a filibuster over a three-year-old "sunset" proposal that would periodically repeal major spending programs if Congress did not formally renew them.
The deadlock came over an attempt by Sen. John H. Glenn (D-Ohio) to expand the bill to require automatic review of tax provisions. Long and other Finance Committee members oppose the move.
The brush against the budget limits was expected to set off a rush by some senators to get around the fiscal 1979 ceilings by offering new tax breaks for future years - permissible under the congressional budget process.
The Senate also is expected to consider a bid by liberals to tack on the Humphrey-Hawkins "full-employment" bill, which has been bogged down in the Senate in a jurisdictional dispute.
In its actions yesterday the Senate also approved a proposal that would allow 950 manufacturers in the recording, food and magazine industries who offer coupons to customers to use the accrual accounting method instead of cash accounting as in now required.