Federal Register: January 2, 2009 (Volume 74, Number 1)
DOCID: fr02ja09-54 FR Doc E8-30793
OFFICE OF MANAGEMENT AND BUDGET
Management and Budget Office
NOTICE: NOTICES
DOCID: fr02ja09-54
DOCUMENT ACTION: Revisions to Appendix C of OMB Circular A-94.
SUBJECT CATEGORY:
Discount Rates for Cost-Effectiveness Analysis of Federal Programs
DATES: The revised discount rates are effective immediately and will be in effect through December 2009.
DOCUMENT 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 costeffectiveness analysis, including leasepurchase analysis, as specified in the revised Circular. They do not apply to regulatory analysis.
SUMMARY:
Discount Rates for Cost-Effectiveness Analysis of Federal Programs,
FOR FURTHER INFORMATION CONTACT
Robert B. Anderson, Office of Economic Policy, Office of Management and Budget, (202) 3953381.
John H. Kitchen,
Associate Director for Economic Policy, Office of Management and Budget.
OMB Circular No. A94.
Appendix C
(Revised December 2008)
Discount Rates for CostEffectiveness, 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_appxc.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/DISCHIST2009.pdf. Updates of the appendix are also available upon request from OMB's Office of Economic Policy (2023953381).
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 leasepurchase analysis.
Nominal Interest Rates on Treasury Notes and Bonds of Specified Maturities
[In percent]
3year 5year 7year 10year 20year 30year
2.7 3.3 3.7 4.2 4.7 4.5
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 constantdollar flows, as is often required in costeffectiveness analysis.
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Real Interest Rates on Treasury Notes and Bonds of Specified Maturities [In percent]
3year 5year 7year 10year 20year 30year
0.9 1.6 1.9 2.4 2.9 2.7
Analyses of programs with terms different from those presented
above may use a linear interpolation. For example, a fouryear project
can be evaluated with a rate equal to the average of the threeyear and
fiveyear rates. Programs with durations longer than 30 years may use the 30year interest rate.
[FR Doc. E830793 Filed 123108; 8:45 am]
BILLING CODE 311001P