Megan McArdle is right about two things: President Obama is bluffing and the House must pass something that will increase the debt limit.
There is one thing I'm sure of: Obama is indeed bluffing with the veto threat, and badly. They could send him a repeal of Obamacare attached to a debt ceiling increase, and he'd sign it. He is not going to endanger our credit rating, or social security checks, in order to prove a point.
Beyond that, I have no idea what is going to happen politically. Either the GOP is going to pass the Boehner bill, go into conference with the Senate, and come out with something Obama will sign--or they won't. I tend to think they will because it would be so damn crazy not to. On the other hand, I thought Democrats were going to back off on health care because it was so obviously career suicide to pass the thing. And I was right--it was career suicide. But they passed it anyway. After a certain point, these things take on a life of their own: it's hard to back down when you're so publicly committed--and when something you want so badly feels like it's almost in reach. So who knows.
I think the Tea Party and conservatives in general have made their points: the debt and deficit are very important and must be fixed. It isn't reasonable to think that they can be fixed in one fell swoop. Pass a debt ceiling increase and Obama will sign it. The attached spending cuts -- real or fake, large or small -- reflect that the will of the American people has shifted substantially in your direction. Take the win.