Ignoring the economy
Paul Krugman writes that the Bush's base is pretty satisfied with the direction of the country and especially the economy, it's just the rest of the country that is hung out to dry.
That may be true, but I think there is another reason that Republicans have steered clear of addressing the economic hardships of the average American: they have no plan. While you can argue that the Democrats are lacking in this department as well, Democrats are not the ones in charge of the country. They can do nothing without Republican support, something they are fairly unlikely to get in this highly partisan world that we've come to reside in.
It explains all the distractions as well - the Social Security battle, filibusters, Terri Schiavo - all because Republicans have no plans to address the actual needs of America as a whole. It worked well enough when they had gay marriage and Iraq as a smokescreen for the actual needs of the country, so they tried a few other issues they thought would have the same appeal. And boy, were they wrong.
I won't say it spells defeat for the GOP come 2006, at least not yet. But it should worry them a little bit that Democrats generally poll stronger on the very issues that the majority of Americans see as the biggest problems they face today. If Democrats can capitalize on this gap, some solid gains could be made 2006, and the changing of America's direction then becomes both the political through line and the mantra for 2008.