Trevor Salmon: Why whole world should breathe a sigh of relief
Some Democrats are very liberal, and this package involves tough choices. Things like Medicaid, for example, are ingrained in the minds of some liberal Democrats, but part of this deal involves a fundamental attack on some of these things.
It's not that people are stupid or nutters, as has been reported in certain parts of the press. But in US politics, when it comes to values, there are certain truths that some people hold to be self-evident.
People in the Tea Party and liberal Democrats do believe what they are saying.
Of course, some of this was about posturing, as there's a presidential election next year. But all of this reminds one of the intellectual politician who just doesn't get it. Most presidents would have acted on this before now, so it does raise questions about Mr Obama and whether he is too clever by half. A lasting legacy of all this will be how Mr Obama is seen by voters. The death of Osama bin Laden, which saw Mr Obama's popularity temporarily rise, now seems light years away.
Bill Clinton said it was "the economy stupid" when he was first elected as president in 1992. An important question is how will voters react to this latest episode and what will now happen in next year's election, which could be a difficult one for Mr Obama.
We won't know until this time next year who Mr Obama's Republican opponent will be. During his election campaign in 2008, Mr Obama ran on the slogan "Yes We Can". But if lots of voters are out of work and struggling financially, what will he run on next time?
If the Republicans think that they can win the election, then they will have a credible candidate.
There's also the issue of there being elections to Congress every two years, which means that, as recently as last November, some politicians had said to voters there would be no more taxes or cuts. They now have to face those voters again, two years after making those promises.
However, we have not seen the end of the crisis and there is still a lot coming down the road.
Yes, there has been an agreement, but we have to ask how long this will last. What will the bipartisan panel agree to cut, for example, when it actually comes to it?
America likes to think it is leading the world, but if this deal had not been reached, this leadership could really have been threatened. It would have been as significant as the loss of the Vietnam War or the Watergate scandal. It would have been a devastating low.
If there had been no deal, interest rates would have gone up and the US would probably have gone into recession. This would undoubtedly have impacted on us all and the world should therefore breathe a sigh of relief.
• Trevor Salmon is a professor of international relations at the University of Aberdeen.