Klobuchar: Biden, McCarthy should negotiate on budget, not hold Americans’ mortgages ‘hostage’ over debt ceiling

Editor’s note: This report has been updated to highlight Sen. Amy Klobuchar’s (D-Minn.) emphasis on budget negotiations.

Sen. Amy Klobuchar (D-Minn.) said on Sunday that President Biden and Speaker Kevin McCarthy (R-Calif.) should negotiate on the budget and not hold Americans’ mortgages “hostage.” 

“That is the place to negotiate and they should start those negotiations now, not using the American people and their mortgages as hostage because right now, we’ve got to simply make clear we’re gonna avoid default and get this behind us,” Klobuchar told CNN’s Dana Bash on “State of the Union.”

“We pay our bills.”

Klobuchar said that the “main goal” is to ensure the United States does not default on its debts. She also said the repercussions would be “huge” if they went along with McCarthy’s current plan for the budget. 

“If you go forward as McCarthy wants, what will happen? You will literally see interest rates go up for mortgages, for loans. You’re gonna see the stock market plummet again that we can’t afford,” the senator said. “We have just come out of this pandemic and our economy is strong. Unemployment is low. We don’t want to go the wrong way.”

If the U.S. does not vote to raise the debt ceiling by June, the country could risk defaulting on its debt. 

McCarthy introduced a budget plan to his Republican colleagues last week that would raise the debt ceiling by over $1 trillion but also return federal spending to 2022 levels and cap growth at 1 percent annually.  

“So my proposal is debate this step,” Klobuchar said on Sunday. “That is a place to debate this,” she added. “Don’t let it default.”

–Updated at 12:37 p.m.