[Update: the Senate passed the compromise package, 89-8, in the early morning hours; the House has not yet voted, meaning that the country is over the cliff.]

As I write this, the latest news from Capitol Hill is that even if the Senate votes before midnight on the last-minute deal that Senators Harry Reid and Mitch McConnell have put together, the House definitely will not. Thus, the country will go over the fiscal cliff, at least for one night. Still, the betting in Washington is that a bill will be agreed upon tomorrow, or maybe the next day. Assuming it passes both chambers of Congress—a non-trivial assumption—there won’t be any great cause for celebration. It’s a shoddy compromise that does credit to nobody involved, and it raises questions, once again, about President Obama’s willingness and ability to face down the Republican extremists.

About the best that can be said of the deal is that it avoids a hasty shift towards big spending cuts, which could endanger the recovery. But that’s only because the deal punts most of the big questions about federal spending into 2013, when the G.O.P. ultras will be eager to exploit the fact that the Administration once again needs their support to raise the debt ceiling. Anybody who was hoping that the fiscal-cliff negotiations would settle the issue of deficit reduction for the next ten months, let alone the next ten years, will be disappointed.

Come February or March, when the debt ceiling will be breached, we could well be back to the summer of 2011, with the G.O.P. holding the economy hostage and demanding big cuts in Social Security and Medicare. The President has said that he won’t negotiate with the Republicans over the debt ceiling, but will he have any choice? Even before that showdown, there will be questions about the concessions that his negotiators made to reach this deal.

The White House will claim—Obama already has claimed—that the deal is a worthwhile one because it avoids a big tax increase for middle-class families and extends unemployment benefits, and several other income-support programs, for millions of Americans. That is all true, but it isn’t saying very much. The Republicans, wary of being accused of robbing the poor to pay the rich, were always going to cave eventually on extending unemployment benefits and preserving the enhanced tax credits for low-income families. Similarly, there was never any prospect of Congress allowing the Bush tax cuts for the lower income brackets to expire. The only question was whether the cuts would be made permanent in the days before or after January 1st, and by an act of the old Congress or the new one.

In order to prevent a few days of confusion and possible turmoil in the markets, the Administration agreed to raise the income threshold at which the higher top rate kicks in, from $250,000 to $450,000. (For individuals, it will be $400,000.) That was a big concession. It means that only about a million and half households, rather than three million, will face the new top rate of taxation, and, for future reference, it effectively designates any family that earns less than $450,000 a year as middle class, which is ridiculous. The median household income is about $50,000 a year. Four out of five American families earn less than $100,000 a year. Fewer than one per cent of households earn more than $450,000.

Having lambasted the Bush tax cuts as reckless when they were first introduced, Obama and the Democrats have now conceded that, under no circumstances, should anybody but members of the one per cent—the very richest Americans—be asked to pay higher income tax rates. Well-off Yuppie couples—ad executives or lawyers, say, who pull down $200K a year each—are to be treated like janitors and cops. In a country wary of consumption taxes, such as gas taxes and V.A.T., this puts a strict limit on the revenues that the federal government can raise. It virtually concedes the Republican argument that, going forward, the burden of deficit reduction should fall on spending cuts.

And that wasn’t the only surrender on the White House’s part. In giving up on extending payroll-tax cuts it introduced in 2010 and 2011—a concession it made weeks ago—it gave lie to the claim that middle-class families won’t face a tax increase. For the past two years, American workers have been paying two percentage points less than usual in payroll taxes. Now the rates will go back to normal. For a family earning $60,000 a year, this will mean a tax hike of about a thousand dollars.

Taken in isolation, there were sound reasons for restoring the payroll tax to its normal level. (The proceeds are used to pay for Social Security and Medicare.) But the feeling grows that, somehow or other, President Obama didn’t make the most of the situation he found himself in. In addition to raising the top tax threshold, he agreed to a very modest raise in the tax rate on dividends and capital gains—from fifteen per cent to twenty per cent. If the Bush tax cuts had been allowed to expire, dividends would once again have been treated as ordinary income, which means that the very rich—who receive most of them—would have paid a rate of 39.6 per cent.

That’s a big plus for the one per cent, as is the agreement to exempt the first five million dollars of inherited wealth from the estate tax. (In the old days, the exemption was $1 million.) And in an even bigger win for the members of the 0.001 per cent, there doesn’t appear to be any mention in the agreement of eliminating the earned-interest deduction used by hedge-fund and private-equity managers, or of enforcing the Buffett rule. So much for cracking down on the loopholes enjoyed by Mitt Romney and his cronies.

To be sure, the Republicans in Congress aren’t easy to deal with, and, as I said earlier, Obama didn’t have as much leverage as it first appeared. But he always had the option to walk away from the talks, let the Bush tax cuts expire, and then sit down after the New Year with the Republicans and talk about restoring some of them on a selective basis in return for an extension of the debt ceiling. Unfortunately—and this was something I noted early on—the President never really appeared willing to play this card, which encouraged the G.O.P. to be its obstreperous self.

As the details of the agreement leaked out on Monday, there was a rare consensus among liberal and centrist economic commentators that it was a pretty putrid one. Robert Reich, the former Labor Secretary, called it a “lousy deal.” Marc Goldwein, the policy director at the Committee for a Responsible Budget, favored an excremental adjective. Even Jared Bernstein, a liberal economist who until pretty recently worked for Vice-President Joe Biden, was skeptical. “But jeez,” he wrote on his blog. “This meets the R’s further on their side of the field than one might have expected given the White House’s leverage.”

Perhaps there is something about the deal that these folks are missing. I hope so. For now, coming just two months after Obama was reëlected with a handy majority of the popular vote, it all seems pretty depressing.

Photograph by Chip Somodevilla/Getty.