As of two weeks ago, the conventional wisdom was that bargaining had to take place between Democrats and John Boehner because the House of Representatives was the sticking point for negotiations. As of today, bargaining is taking place between Democrats and Mitch McConnell.
I see tactical virtues of that arrangement for conservatives, but no clear sign that the fundamental logic of the situation has shifted. We know from the failure of "Plan B" that there's substantially Republican opposition to casting an affirmative vote in favor of anything that does anything other than fully extend the Bush tax cuts. So a deal will need to pass with Democratic votes. And the House Democratic caucus is much more liberal than the Senate Democratic caucus. The Senate contains Democrats from Alaska, Akransas, Louisiana, Missouri, North Carolina, South Dakota, North Dakota, and Montana. It includes Joe Lieberman.
The House isn't like that. The flipside of House Democrats having fared so poorly in the 2010 midterms is that virtually everyone sitting in the current House has a very safe seat. To be sure, Obama could roll them. But when you consider the timing, if liberal members think they're literally a few hours away from locking a more favorable baseline into place that becomes a tough exercise in arm-twisting. You're not talking about holding out indefinitely against pressure. You're talking about blowing things up for one afternoon so that things can resume in the new year. Now if the deal is a deal that Nancy Pelosi likes, that's no problem. But Tom Harkin's early and aggressive statements against mere rumors of a deal are an indication that what's being discussed is something liberals don't like. Now you don't need Harkin to pass a bill in the Senate, but unless Boehner can get his troops in line you do need House members with Harkin-esque views to pass something there.