So here we are, the start of the Republican GOP's insane clown posse, ready to talk about the deficit while they make no proposals to improve the situation. We can look forward to a show down in the near future in which the GOP claims they are going to hold the debt ceiling hostage. If Democrats don't agree to their cuts they claim they will not extend the debt ceiling. Not only is this an empty threat because the GOP, for all their insanity isn't THAT insane, but I think there's a way out of it for Obama and the country.
In our constitution, the Congress is responsible for setting up laws and the President is responsible for executing them. In the case of a show down over the debt ceiling it puts two congressional mandates in contradiction. In effect, they tell the President to spend the money, while telling him not to borrow any. As the President, he has authority over the Treasury, and as such, he can simply tell them to keep issuing new debt in defiance of Congress' refusal to raise the debt ceiling.
Breaking the Law
Now you might think this would put him in violation of the law, but in this situation, Obama would have contradictory mandates from Congress. One mandate would tell him to spend the money, and the other would tell him he can't have the money. So which law is he to follow? Congress is the one that created the contradictory situation, so why should Obama feel compelled to commit governmental suicide because of that?
Okay, Now Go Ahead and Enforce It
But the reality is that the law doesn't really matter in that situation. If Congress didn't extend the debt ceiling, and Obama told the treasury to ignore them, what would Congress do about it? They can't impeach him without the support of the Senate which would presumably not be on board. They can take the case to court, sure, and that'll take a couple years to process. Even if they could get an expedited ruling from the Supreme Court in their favor, once again, how do they enforce it?
The reality is that I don't think even Republicans are stupid enough to not extend the debt ceiling, but if they were, Obama has the authority to ignore them if he chooses to exercise it. Granted, even in doing so we'd probably pay a price for it in the markets because of the uncertainty associated with it. But in the long run he can prevent economic doomsday if Republicans aren't smart enough to do the right thing.