It bowed at the alter of austerity, but the Senate Budget Committee drew the line yesterday at sacrificing sacred cows.

High priest of the ceremony was Sen. Ernest F. Hollings (D-S.C.), whose zeal for domestic spending restraint, formidable as it may be, suddenly faded when it was suggested that tobacco price supports be scrapped in the cause of fighting inflation.

Eliminating the $200 million the government pays annually in tobacco price supports would "destroy the agricultural backbone of 16 states," claimed Hollings, who is up for reelection this year in one of them.

"The tobacco industry," he said with some passion, "is supporting the government."

Hollings' problem -- and the committee's -- started Tuesday when, largely at his behest, the senators voted to raise defense spending $5.8 billion more than President Carter has requested.

Then the committee added an extra $300 million for water projects, at the behest of various western senators, many of whom are counted among the committee's leading budget-cutters on other issues.

These two actions jeopardized Chairman Edmund S. Muskie's plan to balance the budget -- even have a little surplus for the first time in 12 years -- and still have some money left over for a tax cut next fiscal year.

As the committee worked late into last night, it began cutting into social programs, deepening Muskie's recommended cuts by $200 million for urban grants, $600 million for public-service jobs and $500 million for various income security programs. It also approved annual, rather than semi-annual, cost-of-living increases for federal retirees, which would save $500 million.

The committee also agreed to cut the $836 million Postal Service subsidy by $600 million, which could end Saturday mail delivery.

Tuesday's ride on the budget see-saw -- upping the totals for defense and some projects -- gave Muskie a jolt. At one point, he boiled over at Sen. Orrin Hatch (R-Utah), who very much likes to think of himself as a fiscal conservative, but is also pro-defense.

Hatch accused Muskie's staff of incompetence in producing misleading charts on the relative strength of NATO and Warsaw Pact preparedness, and Muskie responded that Hatch was expressing a "paranoid, conspiratorial view." A committee staffer said the other members "just sat there and ducked."

By the time senators regrouped yesterday, Sen. Howard Metzenbaum (D-Ohio) sensed that it was going to be another pet-project day. So he facetiously proposed an increase in funds for urban parks, which is one of his pet projects, so he could demonstrate self-restraint by voting against the increase. The committee obliged voting against the urban park money, prompting Metzenbaum to "thank the committee for [its] confidence."

With that out of the way, the committee got down to the business of scrutinizing money for environmental protection, a pet cause of Muskie.

At this point Hollings pounced on $6 billion in unobligated grants for water cleanup projects as a worthy target for cuts -- an idea that Muskie called "ridiculous" and "nuts."

Sen. Daniel P. Moynihan (D-N.Y.) chimed in, admonishing the committee to be "a little more mature" in carrying out its anti-pollution commitments.

Hollings complained that he was tired of being called "immature or nuts or ridiculous" for trying to hold the line on spending without jeopardizing national defense.

Muskie responded that Hollings was "dumping responsiblility" on him to make up for the Pentagon budget overrun. "As he pursues his [causes], I pursue mine," said Muskie, insisting that he yields to no one in pushing for spending restraint.

Minutes after the committee rejected Hollings' proposed cutbacks in water and sewer grants, he found the budget battle erupting in his own backyard as Sen. Henry Bellmon (R-Okla.), later joined by Sen. Gary Hart (D-Colo.) and Metzenbaum, proposed terminating tobacco price supports. h

Bellmon complained that the government was fighting lung cancer with one hand while encouraging tobacco production with the other. Hollings responded that "there was no conclusive proof" that the two are related.

What is important, he said is that "146,000 small farms" depend on price supports to encourage production that returns much more to the government in taxes and other revenues that it takes out in subsidies. Price supports for farmers are preferable, he added, to having to "send them food stamps or build them an urban park."

Why, Hollings asserted, there is even talk around Congress of banning tobacco and legalizing marijuana. If there are any price supports for growing marijuana, Bellmon deadpanned, he would move to scrap them too.

Hollings eventually prevailed in a 5-to-9 vote against Bellmon's no-supports proposal, which Muskie quietly supported.