The new battlefield for the GOP should begin with the continued independence by the states. States right are not uniquely a conservative idea. My Libertarian friends are rabid advocates of the constitutional principles of a republic form of government. The states that are currently successful and prosperous are run by Republicans. How have the Republicans during one of the worst financial crisis made their states into business attracting job producing machine? Simple. Lowering taxes and balancing state budgets. Some had slash state spending and reigned in out of control entitlements for unionized state workers. Go and look for yourself the tale of two states. Just look at the state of California as compared to Texas. Both have the burden of illegal immigrants. Both are massive and highly populated. One is losing citizens and businesses on a daily basis. The other, Texas, is stealing both of these from California.
Right now there is little that can be done at the federal level. Washington is stuck and locked and there will be no good to come of it. Now at the state level there are legislative maneuvers that can be done to prevent the feds from hurting states prosperity. The states have to remember that once they except a government entitlement they will not too long down the road have to be responsible to pay for it. A state does not have to except federal grants or funds. Governors must begin to push the federal government out of their states and rely on the citizens and businesses within their borders to provide the services and revenue to run it. Power must be pushed down to the smallest level of management possible. The closer the power to provide for it's citizens is to the local level, the better those leaders know just how to serve it's citizens. Once the people are empowered to do for themselves and are free of the regulations that keep them from true freedom, it will be easier for the state to be successful.