At the same time, however, NASA recognizes that it is through the Government procurement process that a substantial portion of funds appropriated by the Congress are expended and that such expenditures have an appreciable impact on the national economy.

The procurement process has become increasingly complex, not only because of the technical and management intricacies of weapons, space, and other major systems now being acquired, but also because of the number of statutory and other governing enactments impinging on the procurement process, a sizable proportion of which have been promulgated independently, and not necessarily in consideration of basic procurement statutes.

NASA feels, therefore, that a comprehensive and constructive review of the type contemplated by S. 1707, examining Government procurement processes in total perspective may well result in recommendations that will enable achievement of specific and overall improvements in Government procurement.

It shares with others the objective that the Government's procurement processes must be the very best that can be achieved and will cooperate fully with the Commission on Government Procurement if the legislation establishing it is enacted.

This report has been submitted to the Bureau of the Budget, which has advised that, from the standpoint of the administration's program, there is no objection to its submission to the Congress.

Sincerely yours,

ROBERT F. ALLNUTT, Assistant Administrator for Legislative Affairs.

The Committee on Finance, to which was referred the bill (H.R 12829) to provide an extension of the interest equalization tax, and for other purposes, having considered the same, reports favorably thereon with amendments and recommends that the bill, as amended, do pass.

I. SUMMARY

H.R. 12829 as it passed the House extends the interest equalization tax until March 31, 1971. The tax otherwise would expire on September 30, 1969. The House-passed bill also modifies the President's discretionary authority to vary the tax rates so he may prescribe a lower rate of tax for new issues than the rate applicable to outstanding issues. (The law presently requires the tax rates that apply to new and outstanding issues to be the same.) The committee has accepted the House bill with a few technical changes which are described below. In addition, it has added an amendment, unrelated to the interest equalization tax. The amendment, identical to the text of S. 2718, would modify the Gun Control Act of 1968 so as to repeal the registration requirements related to persons purchasing shotguns, rifle, or .22 caliber rimfire ammunition, or component parts of these types of ammunition.

The present interest equalization tax, in effect, provides the equivalent of a three-quarters percentage point per annum rise in interest costs for foreigners obtaining capital from U.S. sources either from the sale of debt obligations with a maturity of 1 year or more or from the sale of stock which is treated, in effect, as a long-term debt obligation (28%1⁄2 years or more to maturity) for purposes of the tax. The discretionary authority presently available to the President enables

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