WASHINGTON--The U.S. Treasury Department raised its borrowing expectations for the third quarter of the calendar year, but is still issuing far less debt than in recent years.

The Treasury Department estimated Monday that it will issue $192 billion in net marketable debt from July through September, $22 billion more than projected three months ago. Still, officials said borrowing remains low, with the lowest third-quarter debt issuance since 2007.

The federal government's fiscal year starts on Oct. 1. The Treasury said it expects to borrow $187 billion in debt for the October-through-December quarter. The federal government's borrowing needs have lessened as higher taxes and an improving economy have boosted revenue.

That would leave government accounts with $140 billion in cash by the end of December.

In its quarterly estimate of borrowing, the Treasury said it paid down $64 billion in debt from the start of April through the end of June, compared with its earlier estimate of $78 billion.

The government ended the second quarter with a cash balance of $139 billion, compared with a prior forecast of $130 billion.

The budget deficit for the fiscal year is expected to total $492 billion, which would be the smallest amount since 2007, according to the Congressional Budget Office.

Reductions in near-term military spending and falling longer-run costs associated with the Affordable Care Act have also caused the gap between spending and revenue to narrow.

The Treasury sells bills, notes and bonds to finance government operations and pay off debt. Every quarter, it holds a refunding--a replacement of government debt (often debt that is about to mature) with new debt. More details of Treasury's borrowing plans are due Wednesday during the agency's quarterly refunding announcement.