[Federal Register Volume 63, Number 17 (Tuesday, January 27, 1998)]
[Notices]
[Pages 3932-3933]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-1826]
=======================================================================
-----------------------------------------------------------------------
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.
-----------------------------------------------------------------------
SUMMARY: The Office of Management and Budget revised Circular A-94 in
[[Page 3933]]
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 January 1999.
FOR FURTHER INFORMATION CONTACT: Robert B. Anderson, Office of Economic
Policy, Office of Management and Budget, (202) 395-3381.
Joseph J. Minarik,
Associate Director for Economic Policy, Office of Management and
Budget.
[OMB Circular No. A-94, Revised, October 29, 1992]
Appendix C
(Revised January 1998)
Discount Rates for Cost-Effectiveness, Lease Purchase, and Related
Analyses
Effective Dates. This appendix is updated annually around the
time of the President's budget submission to Congress. This version
of the appendix is valid through the end of January, 1999. Copies of
the updated appendix and the Circular can be obtained from the OMB
Publications Office (202-395-7332) or in an electronic form through
the OMB home page on the world-wide WEB, http://www.whitehouse.gov/
WH/EOP/omb. Updates of this appendix are also available upon request
from OMB's Office of Economic Policy (202-395-3381), as is a table
of past years' rates.
Nominal Discount Rates. Nominal interest rates based on the
economic assumptions from the budget 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)
3-Year............................................................. 5.6
5-Year............................................................. 5.7
7-Year............................................................. 5.8
10-Year............................................................ 5.9
30-Year............................................................ 6.1
Real Discount Rates. Real interest rates based on the economic
assumptions from the budget are presented below. These real rates
are to be used for discounting real (constant-dollar) flows, as is
often required in cost-effectiveness analysis.
Real Interest Rates on Treasury Notes and Bonds of Specified
Maturities (in Percent)
3-year............................................................. 3.4
5-year............................................................. 3.5
7-year............................................................. 3.5
10-year............................................................ 3.6
30-year............................................................ 3.8
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. 98-1826 Filed 1-26-98; 8:45 am]
BILLING CODE 3110-01-P