By nature, Obama gravitates toward compromise. Those who believe that he is a strongly ideological liberal are buying into a conservative-generated caricature. By showing his willingness to compromise, he might actually win a political battle for a change. They were engaged in a game of chicken, and Obama backed off first. The Republicans, if this compromise actually holds, look like they were willing to allow all tax cuts to expire in order to protect those for upper income Americans. Obama ends up looking like the guy who was willing to compromise in order to protect the majority. In this case, I think that many independents, the only voters that really matter, are going to view his actions in a positive light.
In my mind, both parties are, as always, being fiscally irresponsible. Because we are still struggling economically, I can somewhat tolerate some more irresponsibility, but only temporarily. The question is whether they will finally raise some taxes and cut spending when the economic situation improves. Personally, I doubt that this will happen. Both parties are afraid of asking the American people to sacrifice.