That rumor has been flying around, in part due to the natural opacity of last-minute deals struck at the eleventh hour of a “crisis.”  The legislative branch controls the debt ceiling, but Democrats have occasionally proposed to either eliminate it altogether or allow the executive to set it — at least when a Democrat is President.  So what exactly did the Reid-McConnell bill do to the debt ceiling?  Politico has the source of some confusion on this at the bottom of their story:

The legislation also includes a McConnell-written proposal that would allow Congress to disapprove of the debt-ceiling increase. Lawmakers will formally vote on rejecting the bump of the borrowing limit – if it passed, it could be vetoed by Obama.

The deal would also deliver back pay to furloughed federal workers, require a study of income verification for people seeking health-insurance subsidies under the Affordable Care Act and also allows the Treasury Department to use extraordinary measures to pay the nation’s bills if Congress doesn’t raise the debt ceiling in a timely fashion.

Kerry Picket at Breitbart also noted the rumors that the deal took the debt ceiling out of Congress’ hands (working off of an earlier version of Politico’s story), but included a caveat:

The plan includes a proposal offered by McConnell in the 2011 debt ceiling crisis that allows Congress to disapprove of the debt ceiling increase, which means lawmakers will formally vote on whether to reject a debt ceiling increase until Feb. 7. Obama can veto that legislation if it passes. If Congress fails as expected to gather a two-thirds majority to override the veto, the debt ceiling would be raised. …

However it would only apply to the next debt ceiling vote.  The debt limit can only currently be increased if Congress affirmatively votes to raise it and the president signs it into law.  During Congress’ last debt limit debate in 2011, Senate Minority Leader Mitch McConnell (R – KY) wanted to invert this process by making it automatic, unless Congress voted against it and the president did not veto it.  Theoretically, Congress could override a veto, but given the current makeup of both chambers that would be nearly impossible.

This looks more like an out in case the debt ceiling gets hit before the February 7th deadline.  The language starts on page 24 of the bill, in a section that expires on February 7th and only applies to payments due before February 8, 2014.  It’s essentially a way to ensure that Congress doesn’t have to have another debt-ceiling fight earlier than expected, allowing Obama to suspend the debt ceiling only with a presentation to Congress that the current ceiling would be hit for obligations due before February 8th.  It then gives Congress the ability to overrule Obama if necessary, but this again only applies for the short period of the deal.  After February 7th, the normal order returns, and Congress has to raise debt ceilings again.

It’s still something to watch in the future, but at the moment this just looks like a temporary method to make sure the can stays kicked until February 7th.

Update: Let me add a couple of more caveats.  The executive cannot spend what is not appropriated by Congress, except for statutory spending — entitlements — and interest payments on the debt.  This may be a response to threats from credit-rating agencies to lower our credit rating, which might force us to offer higher yields on our bonds and will then require us to make larger interest payments.  The debt ceiling doesn’t enable executive-branch spending the same way a credit card does for households, in other words.

Update: As Steve Eggleston notes in the comments, it’s the same language as in the last deal.