The Debt Ceiling is one of those things that seems entirely reasonable in theory, but in practice is utterly insane. Here's the problem.
The government is required to spend a certain amount of money. How much? That's up to Congress, which sets the budget. The executive can't reduce that amount of money unilaterally.
However, Congress also sets a "Debt limit" which means the executive may run out of money, be unable to borrow more, and find it cannot spend the money congress has told it to.
So what's the point? In practice, the only purpose the ceiling serves is to allow congress to create an artificial crisis whenever it wants. If Congress actually wants to reduce the amount of debt, or put a ceiling on it, it has always had the power to do so. The only purpose of the ceiling is to create a crisis and make it appear to be the executive's fault.
What's Obama doing about this? Answer: I don't know. Obama has ruled out taking the "constitutional option" by all accounts - basically saying "Screw you guys, you're telling me to break the law whatever happens, which by definition means your laws are unconstitutional, so I'm going to ignore the limit which appears to be the law that's the problem". Obama has a habit - public option, DADT, etc - of pretending his hands are tied when, in fact, he actually supports the outcome anyway, and his recent claim that this was a historic opportunity to cut social security makes me think that he, ultimately, wants to cut government spending.
Recently I read an article in the Washington Post which included a quote from Obama, in 2006, saying he was going to vote against an increase in the debt ceiling as a senator, which he and the democratic caucus ultimately did. While some protested this was a typical case of the MSM trying to be "balanced" using a "both sides do it" argument, the WP got this right. Yes, Obama was right that in 2006, when the economy was doing well, paying down the debt was the right approach. Virtually every mainstream, sane, economics system teaches you that in Econ 101. However, the only method to achieve this is to reduce the government's spending mandates. Obama didn't try to do that, he simply voted for something that would create a crisis.
The debt ceiling is not an effective method to reduce the debt. It does create uncertainty in the markets, and will cause lenders to demand higher interest rates for government borrowing in future, and it'll cause chaos if it's actually hit. It's a stupid idea, and it has to go.