Overseas creditors such as China and Japan enabled the U.S. to spend its way out of the recession as they gobbled up 80 percent of the nation's Treasuries. Now, their holdings are dropping toward the lowest level in a decade, while homegrown investors have picked up the slack.

Excluding Treasuries held by the Federal Reserve, U.S. investors such as mutual funds and pensions have boosted their stakes in the nation's long-term interest-bearing debt securities since the credit crisis to 33 percent, according to the latest government data. With foreigners buying the fewest Treasuries last year since 2006, domestic buyers have added $33 billion of bonds, according to JPMorgan Chase & Co.

"Domestic bidders are stepping in as foreign bidders are stepping out," William O'Donnell, the head U.S. government bond strategist at RBS Securities Inc., one of the 22 primary dealers that are obligated to bid at debt auctions held by the Treasury, said in a telephone interview from Stamford, Connecticut.