Over the last few years, such party operatives as Karl Rove, Grover Norquist, and Tom DeLay have cowed Democrats with chesty, blustering talk about a "permanent majority." But like the Democrats circa '76, Republicans entered Washington three years ago under an ideological banner that had already lost its relevance to most Americans.

Twenty years earlier, a policy agenda of tax cuts and smaller government made practical sense for the country. Reagan succeeded in cutting taxes, and his successors, George H.W. Bush and Bill Clinton, eventually got government spending under control. By the 2000 election, upper-bracket tax rates had been steady for two decades at a rate far lower than they were through most of the previous 50 years, and the federal government's share of GDP was 18.4 percent, well below where it had been during the Reagan administration. While short-term, broad-based tax cuts still made sense as a recession-fighter, the big challenges America faced--chiefly the unrecognized danger of terrorism and the coming retirement of the baby boom generation--could not be solved with further tax and spending cuts. If anything, the opposite would be called for.