Discount Rates for Cost-Effectiveness Analysis of Federal Programs, 1743 [2012-308]
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Federal Register / Vol. 77, No. 7 / Wednesday, January 11, 2012 / Notices
OFFICE OF MANAGEMENT AND
BUDGET
Discount Rates for Cost-Effectiveness
Analysis of Federal Programs
Office of Management and
Budget.
ACTION: Revisions to Appendix C of
OMB Circular A–94.
AGENCY:
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,
SUMMARY:
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 2012.
FOR FURTHER INFORMATION CONTACT:
Robert B. Anderson, Office of Economic
Policy, Office of Management and
Budget, (202) 395–3381.
Michael C. Falkenheim,
Acting Associate Director for Economic
Policy, Office of Management and Budget.
Attachment
OMB Circular No. A–94
Appendix C
(Revised December 2011)
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 2012. A copy of the
updated appendix can be obtained in
electronic form through the OMB home page
at https://www.whitehouse.gov/omb/
circulars_a094/a94_appx-c/. The text of the
Circular is found at https://
www.whitehouse.gov/omb/circulars_a094/,
and a table of past years’ rates is located at
https://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)
395–3381.
Nominal Discount Rates. A forecast of
nominal or market interest rates for calendar
year 2012 based on the economic
assumptions for the 2013 Budget 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]
3-Year
5-Year
7-Year
10-Year
20-Year
30-Year
1.6 ................................................................................................................................
2.1
2.5
2.8
3.5
3.8
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 2013 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]
3-Year
5-Year
7-Year
10-Year
20-Year
30-Year
0.0 ................................................................................................................................
0.4
0.7
1.1
1.7
2.0
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. 2012–308 Filed 1–10–12; 8:45 am]
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[Federal Register Volume 77, Number 7 (Wednesday, January 11, 2012)]
[Notices]
[Page 1743]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-308]
[[Page 1743]]
=======================================================================
-----------------------------------------------------------------------
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
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
2012.
FOR FURTHER INFORMATION CONTACT: Robert B. Anderson, Office of Economic
Policy, Office of Management and Budget, (202) 395-3381.
Michael C. Falkenheim,
Acting Associate Director for Economic Policy, Office of Management and
Budget.
Attachment
OMB Circular No. A-94
Appendix C
(Revised December 2011)
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 2012. A copy of the
updated appendix can be obtained in electronic form through the OMB
home page at https://www.whitehouse.gov/omb/circulars_a094/a94_appx-c/. The text of the Circular is found at https://www.whitehouse.gov/omb/circulars_a094/, and a table of past years'
rates is located at https://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)
395-3381.
Nominal Discount Rates. A forecast of nominal or market interest
rates for calendar year 2012 based on the economic assumptions for
the 2013 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 20-Year 30-Year
----------------------------------------------------------------------------------------------------------------
1.6................................................. 2.1 2.5 2.8 3.5 3.8
----------------------------------------------------------------------------------------------------------------
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 2013 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]
----------------------------------------------------------------------------------------------------------------
3-Year 5-Year 7-Year 10-Year 20-Year 30-Year
----------------------------------------------------------------------------------------------------------------
0.0................................................. 0.4 0.7 1.1 1.7 2.0
----------------------------------------------------------------------------------------------------------------
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. 2012-308 Filed 1-10-12; 8:45 am]
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