Comments on Draft Revisions to OMB Circulars A-4 and A-94

Abstract

The Office of Information and Regulatory Affairs (OIRA) issued draft Circulars A-4 and A-94 for public comment earlier this year. Circular A-4 is the set of guidelines governing how federal agencies undertaking any major regulatory initiative should do a benefit-cost analysis as part of their regulatory impact analysis. Circular A-4 sets out guidelines and discount rates for benefit-cost analysis. These new draft circulars will supersede the original circulars last issued in 1992 (A-94) and 2003 (A-4). A group of economists at MIT submitted public comments on these draft circulars. For Circular A-4, the comments focused on three aspects of the new draft: the scope of analysis, treatment of distributional considerations, and discounting. For Circular A-94, the comments focused on assessing the government's cost of capital and discounting. This policy brief provides those submitted comments.