14th Amendment.
The question of whether President Obama can deal with republican obstruction on the debt limit centers around Section 4 and Section 5 of the 14th Amendment. Section 4 is on the validity of US public debt. Section 5 deals with Congressional power of enforcement (Power of Enforcement).
Below is an analysis of each section in relationship to the current issue with the debt limit (from Wikipedia).
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Validity of public debt
Section 4 confirmed the legitimacy of all United States public debt appropriated by the Congress. It also confirmed that neither the United States nor any state would pay for the loss of slaves or debts that had been incurred by the Confederacy. For example, during the Civil War several British and French banks had lent large sums of money to the Confederacy to support its war against the Union.[47] In Perry v. United States (1935), the Supreme Court ruled that under Section 4 voiding a United States government bond "went beyond the congressional power."[48]
The United States debt-ceiling crisis in 2011 raised the question of what powers Section 4 gives to the President. Under the current law, the executive branch of the government (which includes the Treasury and the President) is obligated to carry out all appropriations authorized by the Congress. It has been argued that, in the presence of conflicting statutes (a federal budget statute, which instructs the Treasury to spend a certain amount of money, and a debt ceiling statute, which limits the amount of money that the Treasury is allowed to borrow in process), the statute that was passed more recently "wins"; therefore, in this situation, the President may simply instruct the Treasury to continue issuing bonds beyond the ceiling. Furthermore, such an instruction may be difficult to challenge in court, because it would take a joint resolution of both chambers of Congress to get standing to challenge it.[49] In addition, it has been observed by many, such as legal scholar Garrett Epps, fiscal expert Bruce Bartlett and Treasury Secretary Timothy Geithner, that the debt ceiling itself may be unconstitutional and therefore void as long as it interferes with the duty of the government to pay interest on outstanding bonds and to make payments owed to pensioners (that is, Social Security recipients).[50][51]
The issue of what effect Section 4 has regarding the debt ceiling remains unsettled.[52] Legal analyst Jeffrey Rosen has argued that Section 4 gives the President unilateral authority to raise or ignore the national debt ceiling, and that if challenged the Supreme Court would likely rule in favor of expanded executive power or dismiss the case altogether for lack of standing.[53] Erwin Chemerinsky, professor and dean at University of California, Irvine School of Law, has argued that not even in a "dire financial emergency" could the President raise the debt ceiling as "there is no reasonable way to interpret the Constitution that [allows him to do so]".[54]
Power of enforcement
Main article: Congressional power of enforcement
Section 5, the last section, was construed broadly by the Supreme Court in Katzenbach v. Morgan (1966).[55] However, the Court, in City of Boerne v. Flores (1997), said:
Any suggestion that Congress has a substantive, non-remedial power under the Fourteenth Amendment is not supported by our case law.[56]
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