With the U.S. government just days away from running out of cash, President Biden and House Speaker Kevin McCarthy found themselves locked in negotiations on May 22, facing the daunting challenge of reaching a resolution. The House Republican majority had been staunchly opposing raising the debt ceiling without significant spending cuts, putting the country at risk of breaching the debt limit and potentially defaulting for the first time.

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Amid mounting tension, Biden and McCarthy attempted to maintain a positive front during their meeting in the Oval Office. They exchanged pleasantries for the cameras, highlighting the progress they had made. However, behind closed doors, the atmosphere grew more strained. Biden proposed a debt ceiling increase that not only included spending cuts but also generated new revenue, primarily through tax increases targeting the wealthy. This marked a significant departure for the president, who had previously been reluctant to negotiate on the country's credit, fearing the repercussions of miscalculations on the economy.

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According to sources familiar with the exchange, Biden responded to the GOP demands by saying, "This is nothing we want, just what we can tolerate." However, tensions escalated when Jeffrey Zients, the president's chief of staff, criticized Republicans for threatening funding in critical areas such as health care, education, and science. McCarthy fired back, challenging Zients, "You don't have another option," and questioning whether he would blow up the deal.

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Despite the clash, both sides left the meeting feeling they had made progress toward an agreement. However, the intense confrontation at the White House highlighted the fear and acrimony that engulfed Washington over the past month. The Republican push to slash federal spending nearly pushed the U.S. government into financial chaos. It took a frantic, last-minute effort by Biden and McCarthy, who had no established working relationship, to avert the fiscal crisis largely caused by the GOP.

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In the end, the two leaders relied on a group of policy aides to broker a deal that defused the threat of fiscal brinkmanship, at least for the immediate future. The resulting agreement, the Fiscal Responsibility Act of 2023, trims federal spending by an estimated $234 billion over two years. However, it does little to address the national debt, projected to exceed $50 trillion by the end of the decade. The deal prevents a government shutdown this fall but involves massive automatic spending cuts deemed too severe by both sides. It also temporarily avoids a crippling default until January 2025, setting the stage for another confrontation after the next election.

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The negotiations between Biden and McCarthy involved numerous phone calls across continents and tense in-person meetings, both directly and through their representatives, in the Capitol and at the White House. Through discussions over breakfast, a basketball event, and brief conversations during daily routines, a diverse group of Democrats and Republicans managed to strike a deal and prevent fiscal catastrophe.

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Although Republicans achieved less than they initially aimed for, angering some conservatives who voted against the deal, many GOP lawmakers still believe their fight to reshape the U.S. economy was worthwhile. Representative Scott Perry (R-Pa.), leader of the far-right House Freedom Caucus, stated, "Of course, it was worth it. That's our job, that's what we signed up to do." Despite any discontent with the outcome, many Republicans believed they had a chance to set the country on a more favorable fiscal course, even if that opportunity may have slipped away.