So what now? I think this is about right:
So what we have is two more showdowns in which the parties disagree not just on the outcome but even on the parameters of an outcome. Obama thinks the debt ceiling needs to be raised, full stop, without becoming a bargaining chip in a fight that threatens the stability of the global economy. Republicans want to use that chip. Then there’s the sequester, which Obama thinks should be replaced with spending cuts and tax revenue, and Republicans think should be replaced with spending cuts and more spending cuts.
If Obama makes it through both these events without either accepting draconian social policy or triggering an economic meltdown, then today’s compromise will be seen as a clever first step. That’s not what I expect. I expect instead that his willingness to bargain away his strongest leverage, and the central theme of his reelection, will make the next rounds harder, and embolden Republicans further. I suspect he will wish he had ripped off the Band-Aid all at once, holding firm on tax cuts and daring House Republicans to defy public opinion.