[Federal Register Volume 81, Number 21 (Tuesday, February 2, 2016)]
[Notices]
[Pages 5487-5488]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-01604]


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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 
2016.

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

Devin O'Connor,
Associate Director for Economic Policy, Office of Management and 
Budget.
OMB Circular No. A-94

APPENDIX C

(Revised November 2015)

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 2016. 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 2016 based on the economic assumptions for the 
2017 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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            2.0                2.4                2.7                2.9                3.2                3.5
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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 2017 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
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            0.3                0.6                0.8                1.0                1.2                1.5
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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

[[Page 5488]]

than 30 years may use the 30-year interest rate.

[FR Doc. 2016-01604 Filed 2-1-16; 8:45 am]
 BILLING CODE 3110-01-P