What is one challenge that George Washington and the nation faced during his presidency?

Another challenge that Washington and the nation faced was the question of how to keep the newly formed government solvent.

After the Revolutionary War, the United States owed millions in war debt. Washington was adamant that the United States met all its financial obligations honorably. At the time, the federal government had yet to impose a federal income tax; so, Alexander Hamilton, the Treasury Secretary, imposed several tariffs to raise the revenue needed. Both Washington and Hamilton wanted the government to function as a self-supporting entity. However, both also underestimated the unpopularity of the new tariffs.

In 1786, states like New York and Rhode Island voted to prevent the passage of a national tariff, frustrating Washington's efforts to discharge war debts in an efficient and timely manner. The question of taxation invariably led to issues about representation. There were two camps of opinion about representation and taxes. James Madison's "Virginia Plan" proposed that larger states in a bicameral legislature be given higher representation in the federal government, while William Patterson's "New Jersey Plan" coalesced around the rights of smaller states. 

In the end, Madison's "Virginia Plan" was amended: one house of the legislature would give equal representation to all states, while the other house would apportion congressional seats according to population size. Today, that first house is called the Senate, and the second is the House of Representatives. At the time, however, achieving consensus on the tax issue was a logistical nightmare. Some states fought tooth and nail to avoid the idea of a national tax altogether, citing states rights to design unique fiscal solutions without federal oversight.

In fact, the issue of taxes was so unpopular that the United States came close to a civil war because of it. In 1791, Congress passed a Whiskey tax, and this unpopular tax led to what was called the Whiskey Rebellion in 1794. Basically, farmers felt betrayed by the tax, as they relied on their corn and rye crops to earn profits. Farmers in Pennsylvania were especially angry about the tax on spirits. So, in the summer of 1794, 6,000 men gathered at a field near Pittsburgh to openly challenge the federal government and to defy Washington to disperse them. Another 400 men set fire to the home of John Neville, Pittsburgh's regional tax collection supervisor.

Washington had no choice but to send in federal troops to keep the peace. He issued a public proclamation in August of 1794 that allowed Alexander Hamilton to put together a militia contingent of almost 13,000 men. In the end, the heavy-handed response dispelled the rebellion. However, Washington's efforts drew swift criticism from a former member of his cabinet, Thomas Jefferson, who cited the possibility of federal overreach in the tax matter. The issue of taxes continued to prove a challenge to Washington and the new nation long after the Whiskey rebellion was quelled. In fact, the pitting of rural, agricultural interests against urban, industrial interests soon led to what we know as the two-party system today.