First Read makes a great point -- in pure dollar terms, the Republicans got way less out of the tax deal than Democrats did:

Despite being billed as a great debate over the Bush tax cuts, the struggle between President Barack Obama and congressional Republicans appears to have ended with an extension of the 2001 and 2003 tax cuts representing only about 37 percent of the total cost of the agreement Obama announced Monday night.

And keep in mind, most of that 37% is for families making less than $250,000 a year. In pure numeric terms, the vast majority of the money in this deal is for things the White House (and most Democrats) actually want.

How did Democrats get a deal like that? Ezra Klein's source confirms what I speculated without any information -- Republicans love them some rich folk. They're willing to bargain away a lot to help the very rich:

For one thing, the things [Republicans] wanted were things they really, really wanted. A number of sources with direct knowledge of the negotiations have fingered the estate tax as the major player in the size of the deal. "Republicans were extremely eager to get benefits for the top tenth of a percent of Americans," says one senior administration official.

The only thing that can overwhelm the GOP's partisanship is its overwhelming desire to increase the incomes of the top 1%.

Like I've been saying, however, this doesn't mean Democrats got a good deal. It all depends on how this story ends in 2012. The White House won a pretty substantial amount of stimulus, and a bipartisan agreement that shows its centrist bona fides. (Plus a free set of luggage!) Those things both increase the chances that Obama will win reelection.

But the deal won't be a good one unless it really was a tactical retreat, and Obama fights to phase out the upper-bracket tax cuts. It won't require much fight -- all he needs to do is veto bills that extend the tax cuts, which is way better than having to muster majorities or super-majorities in two houses. That would be rational, it would be good politics and good policy, and if they do it this will be a huge win. It will also be the opportunity to bring back the liberals who are currently furious at the administration. If they decide to cut another deal in 2012, then this will be a huge policy defeat. I don't expect that, but we'll have to see what happens.