The debt ceiling is real. If reached, the United States defaults on its obligations, like you would default on a car loan if you failed to pay. There are real consequences, and they are a thousand times more drastic than the consequences of raising the debt ceiling (This won't always be true as the problem increases. But for now, it is.)
What is happening here is that Obama and the Democrats are attempting to balance the budget in the same bill that raises the debt ceiling, and the Republicans are saying "Nuh uh. No tax increases." The Democrats are willing to compromise on domestic spending cuts and the Republicans still refuse to compromise on raising taxes for people who make more than $250,000 per year to reasonable levels:
So essentially what will happen is that since failing to raise the debt ceiling means armageddon, the bill will have to be gutted so that only the raising of the debt ceiling is included. This means that we won't get the balanced budget that we need.
Yes, it's arm-twisting to glue those two bills together. But look at it this way:
If this amount of blackmail is not sufficient to get Republicans to compromise as much as the Democrats are willing to compromise in order to resolve the deficit, then nothing will. The stakes: global economic collapse next month—and yet they are willing to risk it.
But let's not fool ourselves—they've been willing to risk it ever since they ensured the ease with which the upper class can siphon wealth from everyone and everything else.