From time to time, during periods of sustained budget surpluses, Treasury has entered the market to repurchase its debt. Debt repurchases were first proposed by Secretary of the Treasury Alexander Hamilton in a plan he submitted to Congress in 1795 to extinguish the debt within thirty years. Albert Gallatin, the fourth Secretary of the Treasury, later conducted the first debt repurchases during the period from 1807 to 1812. The last time Treasury paid down debt in this manner was seventy years ago under Secretary Andrew Mellon. In this new period of sustained surpluses, it is important to renew this tradition.
Buybacks have the potential to bring more balance to the paydown of the debt.
Prior to the buyback program, all of the paydown was on the short end of the maturity spectrum. Only approximately 11 percent of total paydown for the fiscal year will be used to pay down debt prior to maturity. We have been very pleased with the results of the initial buybacks. In May, we announced a regular schedule for the buyback program. We anticipate that in the future we will announce the aggregate size of the operations on a quarterly basis at the Quarterly Refunding Announcement.