President Obama is holding firm to his position that he will not negotiate over raising the debt ceiling. Here's why that makes a world of sense:
First of all, the debt ceiling: raising the debt ceiling is not about spending more money (that's a lot of what Washington does, but not right here), raising the debt ceiling is about allowing the government to pay the bills it has already incurred. We have a certain amount of money on the credit card, and we can pay it or default, but we can't ignore it. This requires raising the debt ceiling, something that happens regularly, so that the U.S. may legally pay those bills.
Second, remember last time? Kudos to you if you tuned out after the first ten minutes, but here's the recap: Obama and Speaker of the House John Boehner worked out a deal that raised taxes on millionairres (by allowing the Bush tax cuts to expire), cut programs across the board and raised the debt ceiling. It was a fantastic deal for Republicans who only had one of three branches of government. So, naturally, it was rejected by...those same House Republicans. Because it raised taxes on someone. So, instead we got a patch deal: debt ceiling goes up, and major cuts and the Bush tax cuts expire on January 1st, 2013 (you may have heard of that, people called it the "fiscal cliff") unless another deal was reached. A deal was reached, but now the debt ceiling needs to be raised again, and Republicans want another fight.
For years, the minority party, in this case the Republicans, has extracted a few concessions in exchange for allowing the government to continue to function whenever the debt limit is reached. Never, however, was there any real danger that they would allow the government to default, because who would do that? In 2011, we got our answer: the current group of House Republicans, especially anyone associated with the Tea Party.
Now that Republicans have shown they will kill the hostage, Obama has stopped negotiating. The Republicans did real damage with their toy, and now Obama is trying to take it away. Even if this is a negotiating tactic, it's a good one. The sooner he starts making concessions, the more concessions he will have to give up (anything he offers will be met with scoffs of disgust, see: debt ceiling negotiations, fiscal cliff negotiations, his entire presidency). It's a bold move, but ultimately the most sensible.