[Federal Register Volume 80, Number 19 (Thursday, January 29, 2015)]
[Notices]
[Pages 4948-4949]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-01616]


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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 will be in effect through December 
2015.

FOR FURTHER INFORMATION CONTACT: Gideon Lukens, Office of Economic 
Policy, Office of Management and Budget, (202) 395-3316.

Aviva Aron-Dine,
Associate Director for Economic Policy, Office of Management and 
Budget.

Attachment

APPENDIX C

(Revised December 2014)

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 2015. 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/. The text of the Circular is found at http://www.whitehouse.gov/omb/circulars_a094/, and a table of past years' rates is located at 
http://www.whitehouse.gov/sites/default/files/omb/assets/a94/dischist.pdf. Updates of the appendix are also available upon 
request from OMB's Office of Economic Policy (202-395-3316).
    Nominal Discount Rates. A forecast of nominal or market interest 
rates for calendar year 2015 based on the economic assumptions for 
the 2016 Budget is 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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            1.7                2.2                2.5                2.8                3.1                3.4
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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 2016 Budget is presented below. These 
real rates are to be used for discounting constant-dollar flows, as 
is often required in cost-effectiveness analysis.

                     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
----------------------------------------------------------------------------------------------------------------
            0.1                0.4                0.7                0.9                1.2                1.4
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[[Page 4949]]

    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. 2015-01616 Filed 1-28-15; 8:45 am]
BILLING CODE 3110-01-P