In the first quarter the Treasury reduced the amount of outstanding bills by about $18 billion, partly because tax collections were stronger than expected.

A reason may be that the Treasury has reduced the amount of bills it has auctioned in recent weeks.

He also said that the Treasury could still reduce the size of the 30-year bond auction, an expectation that has already helped support the price.

In recent years, the Treasury has reduced the "when-issued period" between its financing announcements and the date when full payment is required.

Traders are waiting anxiously to see if and how much the Treasury will reduce the size of the 30-year auction.

So, too, has continued talk that the Treasury might reduce the size of its bond offerings.

By taking this action, Treasury has reduced the debt by $200 billion, so as to postpone the date the debt limit is reached.

If this were the case, the Treasury could have eliminated the 30-year bond auction scheduled for next week and reduced the level of 10-year note borrowing.

The Treasury, moreover, did not reduce the issuance of five-year notes, while the Senate cut them by 20 percent.

One reason is that the Treasury has reduced the supply of bills by $1 billion.