Good morning. Each quarter, I have the opportunity to discuss the government's refunding needs with you in this forum. In the past year, these refunding announcements have reflected our nation's ever-strengthening financial condition. Today, I am pleased to read to you a statement from Secretary Rubin:

The Clinton Administration's policy of fiscal discipline has dramatically improved our fiscal situation, and has changed our task from financing a deficit, to managing a surplus. Now, we have reached a new milestone in our nation's financial history: We are paying down $116 billion of federal debt -- the largest debt pay-down that has ever been achieved in a single quarter, or even in a single year.

It is a great accomplishment for this Administration that we are now reducing the debt. Less government debt outstanding means lower interest rates, higher national savings, more investment, and a stronger economy. We have reduced privately held marketable debt from approximately $3.1 trillion in March of 1997, to less than $2.8 trillion -- a pay-down of $320 billion in just over two years.

This is, indeed, a remarkable accomplishment.

Terms of the May Refunding

I will now turn to the terms of the quarterly refunding. We are offering $27 billion of notes to refund $28.8 billion of privately held notes maturing on May 15, and to pay down approximately $1.8 billion.

The securities are:

1. A 5-year note in the amount of $15.0 billion, maturing on May15, 2004, will be auctioned on Tuesday, May 11.

2. A 10-year note in the amount of $12.0 billion, maturing on May 15, 2009 will be auctioned on Wednesday, May 12.

Both of these notes will be auctioned on a yield basis, at 1:00 p.m. Eastern time. As Secretary Rubin has said, we estimate that the Treasury will pay down $116 billion of marketable securities during the April-June quarter. This estimate assumes a $55 billion cash balance at the end of June. Including the securities we are announcing today, we have paid down $ 114-1/2 billion of marketable securities so far this quarter. (See the attachment for details.) We estimate that a cash management bill will be needed to bridge the cash low point from early June until after the June 15 tax payment date.

Looking forward to the July-September quarter, we estimate that the Treasury will pay down approximately $10 billion of marketable securities, assuming a $45 billion cash balance on September 30.

The next quarterly refunding will be announced on August 4, 1999.

Attachment 

Market Borrowing

April-June 1999

(Billions of Dollars)

TOTAL

-116.3

DONE*

-114.4

BILLS

Regular weekly bills

-5.4

52- week bill

-0.9

Cash management bills

-70.1

Total

-76.4

COUPONS

7- year note

-10.2

2- year notes

0.3

5- year notes - end of month

-33.7

30- year inflation-indexed bond

7.4

May refunding

-1.8

-38.0

TO BE DONE

-1.9

*Issued or announced through May 5, 1999.