The Republicans don't need to cave. All they need to do is nothing and let the expense reduction portion of the sequester go over the cliff. Subsequent legislation can fund emergency defense expenditures. Letting the expense sequester go over the cliff will save $3 trillion over ten years, while last night's vote is scored to raise only $600 billion over ten years: a 5:1 ratio of cuts to tax increases.
The Democrats gave away all their leverage when they agreed to the permanent tax rates without getting an agreement to end the expense sequester.
I'm with you: celebrating.
Glad to see at least a few are thinking rationally on this subject, such as yourself.