To comprehend how completely the electoral supernova of 2008 has warped the space-time continuum of Republican politics, consider the current debate over Medicare. For decades, conservatives have believed that Medicare should be starved of resources and replaced with a free-market plan. In 1995, Newt Gingrinch announced that he intended to let it “wither on the vine.” In 1996, GOP presidential nominee Bob Dole bragged about opposing LBJ’s original Medicare bill. In 1997, congressional Republicans helped pass legislation that slashed Medicare spending by 12.7 percent over 10 years. All in all, Republicans have voted to cut the socialized, single-payer, government-run program by more than $1 trillion since 1991.

Knowing this, one might expect party leaders to be pleased now that Democrats have proposed to trim a relatively modest $487 billion in Medicare inefficiencies as part of their ongoing health-care push. But no—Republicans have suddenly morphed into pro-Medicare fanatics. As 2008 Republican presidential nominee John McCain put it earlier this month, “How … can [they] possibly achieve half a trillion dollars in cuts without impacting existing Medicare programs negatively and eventually lead[ing] to rationing of health care in the country?” Hard to say. But it’ll probably be easier to avoid than if McCain had become president and carried out his election-year plan to cut Medicare and Medicaid by $1.3 trillion.

Right now, congressional Republicans seem to have only one guiding principle: everything Obama does on domestic policy is wrong, even if it’s something they believe in. But reactionary obstructionism isn’t a philosophy of governance. It’s a myopic political tactic.

To avoid being marginalized in coming years, the GOP should quit flip-flopping on core beliefs and framing the future as a choice between dogmatic purity and opportunistic moderation. Instead, the party needs to recognize that the moment is right for a more empirical kind of politics. Call it Reality-Based Republicanism: an agenda that addresses real problems (the economy) instead of fake ones (Obama’s so-called “socialism”) by promoting concrete, conservative policy proposals. “The conservative movement has become excessively dogmatic and detached from realities on the ground,” conservative journalist Jim Manzi has written. “It needs to become more empirical and practical—which strike me as traditionally conservative attitudes.”

Going forward, Reality-Based Republicans can capitalize on several trends. As the midterms approach, the national debate will center on job creation and deficit reduction. These are serious dilemmas that require serious fixes; unemployment is expected to hover above 10 percent for all of 2010, and the White House projects that the national debt will rise from 52 to 85 percent of GDP over the next eight years. They also happen to be bedrock fiscal-conservative issues. Independent, educated, middle-class swing voters—the sort of voters who live in all those in red, suburban districts that went Democratic in 2008—aren’t particularly ideological, so in a time of crisis, they’ll be less concerned with “death panels” than with determining who can best ease their financial burden, control government spending, and spur small-business growth. There’s simply no need to wage culture war or purge the impure. These factors, along with apathy among liberal voters, should help the party expand its minority in Congress in 2010.

When that happens, the GOP caucus will be large enough to actually participate in the legislative process (if not large enough to pass its own legislation). To thread the needle, Obama will likely seek support from whichever Republicans are realistic enough to recognize that accepting a premise typically linked to Democrats (the need to combat global warming) doesn’t mean accepting a Democratic solution (cap-and-trade). And these Republicans will, in turn, have the power to push Congress toward more conservative policies (like nuclear power). Other proposals can follow: recruit highly qualified foreigners as part of immigration reform; ensure that workers are automatically enrolled in 401(k) plans; include school-choice pilot programs in any national education package. As GOP strategist Patrick Ruffini puts it, “Republicans can be specific, detailed, and confident in putting forward solutions relevant to the middle class, while also being more conservative than we have been in recent years” (i.e., the period in which President Bush and the Republican Congress presided over massive spending and deficit increases). Let your policies embody your conservatism, Ruffini is saying—and let your personal beliefs speak for themselves. The alternative—alienating anybody who isn’t old, white, or Southern—would be a demographic disaster.

Who could lead this transformation? Amid the current vogue for Palinista populism, Reality-Based Republicans are keeping a low profile. But the vast majority of the bloggers, activists and think tankers who are arguing for a more empirical, problem-solving conservative philosophy seem to agree on a few key names. At the top of the list is a reserved, creative guy named Mitch Daniels, who, as governor of Indiana, has compiled exactly the kind of record that the GOP should aspire to emulate nationwide. After five years in the statehouse, Daniels has managed to lower property taxes by an average of 30 percent; transform a $600 million budget deficit into a $1 billion surplus, launch a massive public-works program with $4 billion raised from privatizing the state’s toll road; and insure 50,000 low-income Hoosiers through a budget-neutral combination of health savings accounts and catastrophic coverage. Other Reality-Based Republicans include wonky Wisconsin Rep. Paul Ryan, who authored intelligent GOP alternatives to Obama’s health-care plan and 2009 budget; Louisiana Gov. Bobby Jindal, who sought to avoid a Medicaid funding crisis by steering thousands of low-income locals into private managed-care plans; and incoming Virginia Gov. Bob McDonnell, who centered his 2009 campaign almost solely on jobs, proposing to increased the size of the Old Dominion’s economic-development incentive fund and provide expanded job-creation tax credits to employers.

All of these politicians are social conservatives, but not one of them makes social conservatism the focus of his public persona. Instead, they’re pointing the way toward a future in which Republicans stop ignoring reality—and start working to improve it.