Senate Leader Reid Says Republicans Play ’Chicken’ on Debt

July 18 (Bloomberg) -- Senate Majority Leader Harry Reid, noting that Treasury Secretary Timothy Geithner has warned of disastrous consequences if the U.S. defaults on its obligations to bondholders, said some Republicans are “playing chicken” with the debt-limit debate.

Reid said Geithner warned Senate Democrats last week that failing to raise the U.S. debt limit by an Aug. 2 deadline would hamstring an economy struggling to recover from the worst recession since the Great Depression.

“It will make what we just went through look like a quaint little crisis,” Reid said on the Senate floor.

Reid and Republican Minority Leader Mitch McConnell will push a revised budget plan this week aimed at allowing a debt- limit increase to avoid a government default as President Barack Obama presses for action before the deadline.

--Editors: Jim Rubin, Don Frederick.

To contact the reporters on this story: Laura Litvan in Washington at bfaler@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net