Treasury Sets Goal For Debt Paydown; $221 Billion Will Be Cut This Year
The Treasury Department announced yesterday that it will be able to pay down $221 billion worth of the publicly held national debt this year without further curtailing its scheduled auctions of new Treasury securities.</br></br>Gary Gensler, Treasury undersecretary for domestic finance, told reporters that earlier cutbacks in the issuance of new securities and the department's planned buyback of $30 billion of older, high- yielding notes and bonds should allow the government to pay down the debt both this year and next.</br></br>But by 2002, when the amount of older securities coming due will begin to drop substantially, additional reductions in auctions will be needed, he indicated.</br></br>"At the present time, we do not believe further changes in the overall pattern of our coupon debt issuance are necessary," he said.</br></br>The price of the 30-year bond dropped on the news. It had climbed in recent trading because many economists and investors had expected the Treasury to say it will soon stop issuing the long bond, increasing the "scarcity value" of those remaining.