WASHINGTON (MarketWatch) - The U.S. Treasury expects to pay off $35 billion of debt in the third fiscal quarter, compared to an earlier projection, given in February, that it would have to borrow $103 billion, the government said Monday. This will be the first quarter that Treasury has paid off debt since April - June 2007. In a statement, Treasury said the changed projection related to higher receipts and lower outlays. For the fourth fiscal quarter, which begins in July, the government expects to borrow $223 billion. This assumes quarter-end cash balances of $75 billion on June 30 and $80 billion on September 30.