Well that's a tough spot. Are you brave enough to put your Obama button back on? You should be able to wear it if others can wear theirs. And ignore her if she brings it up again? (Be prepared with a distracting comment or question on another topic, hee hee).
It sucks working with and for people you have to tiptoe around. I hope for your sake and others that suffer working for her, that she finds a new school or better yet, a new career!