They really thought they were going to win

That's the only explanation I can think of for the Republicans putting themselves in this position:

GOP:  Ok, here's what we want... 

President:  Forget it, here's the deal. 

GOP:  And if we don't comply? 

President:  Massive military cuts, increased taxes, and a recession that wrecks your portfolio, as well as the portfolios of your largest campaign contributors.

GOP:  Oh. 

President:  Good luck in your re-election campaign in two years.

The Republican response:  save the rich men!  Their new strategy:  screw the orthodontists.