[Federal Register Volume 67, Number 25 (Wednesday, February 6, 2002)]
[Notices]
[Page 5623]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-2771]


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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 January 2003.

FOR FURTHER INFORMATION CONTACT: Robert B. Anderson, Office of Economic 
Policy, Office of Management and Budget, (202) 395-3381.

Amy C. Smith,
 Associate Director for Economic Policy, Office of Management and 
Budget.

Appendix C (Revised February 2002)

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 2003. Copies of 
the updated appendix and the Circular can be obtained in an 
electronic form through the OMB home page, http://www.whitehouse.gov/OMB/circulars/index.html. Updates of the 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-year         7-year        10-year        30-year
------------------------------------------------------------------------
         4.1            4.5            4.8            5.1           5.8
------------------------------------------------------------------------

    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         5-year         7-year        10-year        30-year
------------------------------------------------------------------------
         2.1            2.8            3.0            3.1           3.9
------------------------------------------------------------------------

    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. 02-2771 Filed 2-5-02; 8:45 am]
BILLING CODE 3110-01-P