10/07/2024 | News release | Distributed by Public on 10/07/2024 12:23
CBO describes how it selects and uses discount rates to produce estimates for a wide range of federal activities that can have budgetary effects far into the future.
Many activities of the federal government have budgetary and other effects that can last far into the future. To produce estimates of those budgetary effects-and to help lawmakers compare different policies-the Congressional Budget Office often has to translate a flow of future income or payments into an equivalent lump-sum value today. This report describes such present-value estimates, particularly how CBO selects and uses discount rates to calculate the value of future cash flows in its analyses.