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1) Apr. 7 -- OMB is proposing revisions to Circular A-94, which provides guidance on benefit-cost analysis and cost-effectiveness analysis of Federal spending. Circular A-94 was last revised in 1992. These proposed revisions reflect scientific and economic advances since that time. Included in the proposed revisions are changes in the discount rate for benefit-cost analysis. This guidance is separate from Circular A-4, which covers benefit-cost analysis of regulations, rather than spending. Members of the public are encouraged to provide comment. Comments are due by June 6, 2023.

The revised Circular can be accessed at https://www.whitehouse.gov/wp-content/uploads/2023/04/CircularA94.pdf.

Current memorandum: OMB Circular A-94, “Guidelines and Discount Rates for Benefit-Cost Analysis of Federal Programs” (10/29/1992) https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A94/a094.pdf

Appendix C: Discount Rates for Cost-Effectiveness, Lease-Purchase, and Related Analyses for OMB Circular No. A-94 (02/17/2023) https://www.whitehouse.gov/wp-content/uploads/2023/02/Appendix-C.pdf
Table of Past Years Discount Rates from Appendix C of OMB Circular No. A-94 (02/17/2023) https://www.whitehouse.gov/wp-content/uploads/2023/02/discount-history.pdf
Memorandum, 2022 Discount Rates for OMB Circular No. A-94 (02/17/2023) https://www.whitehouse.gov/wp-content/uploads/2023/02/M-23-12-Appendix-C-Update_Discount-Rates.pdf

FRN: https://www.federalregister.gov/d/2023-07179
2) Apr 6 -- OMB blog: Strengthening Our Regulatory System for the 21st Century  
By OIRA Administrator Richard L. Revesz

To meet the challenges and opportunities ahead of us, our country needs an efficient, modern regulatory system that delivers for the American people. Effective regulation can provide critical benefits to the public such as clean air and water, reliable transportation, consumer protection, employment protections, and a stronger economy. But the fact is, parts of the federal regulatory review process haven’t been updated since the 1990s, and since then we’ve seen substantial advances in scientific and economic knowledge. That’s why on Day One of his Administration, President Biden issued a directive to modernize the regulatory review process.

Today, the Biden-Harris Administration is taking two significant steps to do just that. First, the President signed an executive order that will focus federal agency and Office of Information and Regulatory Affairs (OIRA) time and resources where they can have the greatest positive effect, and bring more voices into the regulatory process. And second, OIRA is issuing proposed revisions to its government-wide guidance on regulatory analysis, Circular A-4, to help agencies better account for the full range of benefits and costs of their regulatory actions.  

Taken together, these new steps will produce a more efficient, effective regulatory review process that will help improve peoples’ lives—from protecting children from harmful toxins and lowering everyday costs for families, to improving rail safety and growing our economy from the middle out and bottom up.

Updating the Regulatory Review Process for the 21st Century

Regulatory analysis helps policymakers better understand the effects of various policy choices, with more rigorous analysis reserved for rules with larger benefits and costs. However, the threshold for when such analysis is used has not changed since it was first established decades ago. Since that time, economic circumstances and other factors have changed a great deal. In order to focus OIRA and agency resources where they are most beneficial, the executive order increases the threshold to $200 million from $100 million in annual effects and directs that it be adjusted for GDP growth every three years. This change will help return the number of regulations subject to more rigorous review to levels consistent with earlier administrations.

The executive order also takes steps to encourage greater public participation in the regulatory review process. Members of the public are often the best situated to identify and explain the potential effects of a regulation, identify impacts that can be difficult to measure, and offer creative approaches to challenging problems—but it’s not always easy for them to participate and have their voices heard. That’s why the executive order takes steps to encourage greater public participation when developing regulations, particularly by individuals who may feel the largest effects of regulations but have not previously participated in the regulatory process. OIRA has already been engaging with members of the public to seek feedback on ways to improve public participation in the regulatory process, and the executive order will build on this progress.

Improving Benefit-Cost Analysis

At the same time, today OIRA is also proposing new revisions to its regulatory analysis guidance—known as Circular A-4—to help ensure agencies better account for the effects of their regulatory actions. This guidance was last updated in 2003, and since then we’ve seen significant advances in economic understandings and tools. Among other things, the proposed revisions aim to help agencies better account for the value of future regulatory effects and provide the greatest benefits for the American people. Specifically, the revision updates the discount rate that translates future costs and benefits into present-day values, provides greater support for analyzing distributional effects, and provides more thorough guidance for accounting for risk and uncertainty.

The proposed revisions to Circular A-4 reflect input from experts across the government, but OIRA recognizes that there is significant expertise outside of the government as well. That’s why we are seeking public comment on the proposed revisions, which will also undergo peer review. Members of the public are encouraged to provide comment on Circular A-4.

In addition to the steps to modernize regulatory review, OMB is also proposing revisions to Circular A-94, last revised in 1992, which provides guidance on how federal grant money is spent each year. These proposed revisions will help better target federal funds for crucial projects by updating for decades of scientific and economic advances and knowledge. The proposed revisions will help ensure that federal funds have the greatest possible impact, whether they provide for building levees to protect communities or transportation infrastructure to connect Americans. Members of the public are encouraged to provide comment on Circular A-94.

At the end of the day, the changes we’re announcing and proposing today are focused on ensuring our regulatory system works for the American people. This isn’t about more or fewer regulations—it’s about getting regulations right. Modernizing regulatory review will help ensure that agencies have the information they need to make decisions that will strengthen our economy, our communities, and our country.

We look forward to continuing to help ensure that federal regulations deliver the most value to the American people, helping them at work, at home, and in their communities.  

4) Brookings event April 12 -- A discussion of the Office of Management and Budget’s updated benefit-cost guidelines
On Wednesday, April 12, the Brookings Institution Center on Regulation and Markets and the Niskanen Center will jointly host a conversation with Richard Revesz, administrator of the U.S. Office of Information and Regulatory Affairs (OIRA), and Zachary Liscow, chief economist of the U.S. Office of Management and Budget (OMB). Sanjay Patnaik, director of the Center on Regulation and Markets, will moderate the discussion on proposed updates to OMB Circulars A-4 and A-94, which guide government benefit-cost analysis. The current circulars are several decades old, and these updates aim to reflect new developments in scientific and economic understanding. Niskanen Center President Ted Gayer will give opening and closing remarks.


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