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By Lindsay Dunsmuir and Leah Schnurr
OTTAWA, June 9 U.S. Treasury Secretary Steven
Mnuchin on Friday said he was not worried by lower-than-expected
tax revenues, saying that he has a backup plan for funding
government if Congress did not raise the debt ceiling by August.
Government tax receipts for early 2017 were 3 percent lower
than expected, the nonpartisan Congressional Budget Office said
in a May 5 report.
"Receipts are coming in somewhat lower, and I think that's
in expectation of that we're going to do tax reform," Mnuchin
told a news conference in Ottawa, the Canadian capital, where he
met with Canadian Finance Minister Bill Morneau.
"I've been consistent in (saying) we hope Congress deals
with the debt limit as soon as possible, but in any event, we're
not concerned," he added.
The weaker tax revenues have forced the Treasury to borrow
more money than expected to cover the federal budget deficit,
which is putting the government on track to hit its legal debt
limit sooner than it forecast, experts say.
Mnuchin wants lawmakers to raise Washington's borrowing
limit before they break for a long recess in August.
Asked what would happen if Congress did not act before then,
he replied: "We will be fine if they (Congress) don't do it
beforehand. ... We have plans and back-up plans for funding the
Pressed as to what he had in mind, Mnuchin said: "They are
Treasury secretary superpowers."
President Donald Trump has made tax reform one of his
biggest priorities. He has proposed cutting the corporate income
tax to 15 percent, down from the current top corporate rate of
35 percent, though because of loopholes few multinational
companies pay that rate.
"Nothing is higher on my priority list than getting tax
reform done this year. ... It is critical for economic growth,"
Some Canadian politicians and business leaders are concerned
that if Trump cuts corporate taxes, it could make companies
north of the border less competitive.
"As the U.S. moves forward with their plans, we'll make sure
we understand them well to ensure our tax system stays
appropriate," said Morneau, who gave no further details.
Morneau said he and Mnuchin also spoke about lumber and
trade. Canada softwood lumber exports have emerged as a trade
irritant ahead of talks to renegotiate the North American Free
Washington in April imposed preliminary anti-subsidy duties
averaging 20 percent on imports of Canadian softwood lumber.
(Writing by David Ljunggren; Editing by Nick Zieminski and