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After budget battle Act 1, will Obama, Reid, Boehner have an Act 2?

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"Republicans have insisted on spending cuts and deficit reduction, rather than reviving the economy, and with this speech [Obama] shifted to their ground," says Mr. Zelizer. "This is a White House that feels that Republicans are powerful and have been successful in shifting the public to their issues."

In one respect, the fine art of dealmaking may make a comeback by virtue of divided government. When one party controls Congress and the White House, the template for moving major legislation is to jam it through. But with a new Republican majority controlling the House and the Senate still in Democratic hands, that approach won't work. The only option is to craft an agreement that can muster majorities in both the House and the Senate – and that requires patience, priority-setting, and an ability to mobilize outside groups to influence deliberations.

Obama, Boehner, and Reid now have one budget deal in their pockets, but its scope is modest compared with what comes next. On both the debt ceiling and the 2012 budget, which takes up the thorny issue of entitlement spending for Medicare and Medicaid, the two sides might as well be starting from different planets.

The debt ceiling

Obama wants a "clean bill" in which Congress simply votes to raise the limit.

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