The way I understand it, the debt ceiling is non-negotiable and will be raised because that debt has already been incurred. Obama holds all the cards on that one. We simply can't play with the economy and our credit rating.
Separate of the debt ceiling, is the debate on spending cuts to reduce the deficit (difference between how much government takes in and what it spends) and debt (how much we owe in total, or accumulated deficits). The media, of course, is making the most of the dysfunction in Congress for its own self interest.