Spokesman Howard Schloss said "some general work" was being done by Treasury staff on the mechanics of using budget surpluses to buy back some of the government's trillions of dollars of debt. But any decisions were far in the future.

"This is still very much in an exploratory stage," Schloss said, adding that the department was a long way from making any decisions.

"I don't know if we're talking months or years," he said.

Schloss noted that Treasury Secretary Robert Rubin has stated he agrees with the White House that shoring up the Social Security retirement program was the priority use for any surplus.

The program is expected to come under mounting stress as baby boomers begin retiring in large numbers around 2010.

Once a remedy to ensure Social Security's long-term stability was agreed, "there could be a debate and this (debt buybacks) could be part of the debate," Schloss said.

Schloss said the options included reverse auctions, in which the government bids to buy back securities, or targeted purchases of Treasury bonds on the open market.

Last week, President Clinton said that the budget surplus in fiscal 1999 — the government's accounting year that concludes on Sept. 30 — was expected to be at least $76 billion. The government posted a $70-billion surplus in fiscal 1998, its first surplus in three decades.