US Debt Ceiling Crisis Nears Default, Republican-White House Deal Cuts Fiscal Spending

Between May and June 2023, the U.S. Treasury Department's debt ceiling issue reached a peak of political confrontation in Washington, pushing the nation close to a historic government debt default. The Republican Party, led by House Speaker Kevin McCarthy, insisted on significant cuts to future government spending as a precondition for raising the limit, while the Biden administration demanded a "clean" increase.

After weeks of tense negotiations, the two sides ultimately reached a bipartisan agreement just before the deadline, which included spending caps for the next two years, limits on non-defense discretionary spending, and work requirements for certain federal programs. Many hardline conservatives expressed strong dissatisfaction with the insufficient scale of the spending cuts, arguing that the Republican Party missed a crucial opportunity to force major fiscal austerity and failed to effectively curb wasteful federal spending.