[Federal Register Volume 74, Number 1 (Friday, January 2, 2009)]
[Notices]
[Pages 130-131]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-30793]
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OFFICE OF MANAGEMENT AND BUDGET
Discount Rates for Cost-Effectiveness Analysis of Federal
Programs
AGENCY: Office of Management and Budget.
ACTION: Revisions to Appendix C of OMB Circular A-94.
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SUMMARY: The Office of Management and Budget revised Circular A-94 in
1992. The revised Circular specified certain discount rates to be
updated annually when the interest rate and inflation assumptions used
to prepare the Budget of the United States Government were changed.
These discount rates are found in Appendix C of the revised Circular.
The updated discount rates are shown below. The discount rates in
Appendix C are to be used for cost-effectiveness analysis, including
lease-purchase analysis, as specified in the revised Circular. They do
not apply to regulatory analysis.
DATES: The revised discount rates are effective immediately and will be
in effect through December 2009.
FOR FURTHER INFORMATION CONTACT: Robert B. Anderson, Office of Economic
Policy, Office of Management and Budget, (202) 395-3381.
John H. Kitchen,
Associate Director for Economic Policy, Office of Management and
Budget.
OMB Circular No. A-94.
Appendix C
(Revised December 2008)
Discount Rates for Cost-Effectiveness, Lease Purchase, and Related
Analyses
Effective Dates. This appendix is updated annually. This version of
the appendix is valid for calendar year 2009. A copy of the updated
appendix can be obtained in electronic form through the OMB home page
at http://www.whitehouse.gov/omb/circulars/a094/a94_appx-c.html, the
text of the main body of the Circular is found at http://www.whitehouse.gov/omb/circulars/a094/a094.html, and a table of past
years' rates is located at http://www.whitehouse.gov/omb/circulars/a094/DISCHIST-2009.pdf. Updates of the appendix are also available upon
request from OMB's Office of Economic Policy (202-395-3381).
Nominal Discount Rates. A forecast of nominal or market interest
rates for 2009 based on the economic assumptions for the Fiscal Year
2010 December Budget Baseline are presented below. These nominal rates
are to be used for discounting nominal flows, which are often
encountered in lease-purchase analysis.
Nominal Interest Rates on Treasury Notes and Bonds of Specified
Maturities
[In percent]
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3-year 5-year 7-year 10-year 20-year 30-year
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2.7 3.3 3.7 4.2 4.7 4.5
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Real Discount Rates. A forecast of real interest rates from which
the inflation premium has been removed and based on the economic
assumptions from the 2010 December Budget Baseline is presented below.
These real rates are to be used for discounting constant-dollar flows,
as is often required in cost-effectiveness analysis.
[[Page 131]]
Real Interest Rates on Treasury Notes and Bonds of Specified Maturities
[In percent]
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3-year 5-year 7-year 10-year 20-year 30-year
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0.9 1.6 1.9 2.4 2.9 2.7
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Analyses of programs with terms different from those presented
above may use a linear interpolation. For example, a four-year project
can be evaluated with a rate equal to the average of the three-year and
five-year rates. Programs with durations longer than 30 years may use
the 30-year interest rate.
[FR Doc. E8-30793 Filed 12-31-08; 8:45 am]
BILLING CODE 3110-01-P