Here's the good news for Republicans: The party now has a faction committed to learning real lessons from the 2012 defeat, breaking with the right's stale policy consensus and embracing new ideas on a range of issues, from foreign policy to middle-class taxes, the drug war to banking reform.
Here's the bad news for Republicans: The party also has a faction committed to a reckless, pointless budget brinkmanship, which creates a perpetual cycle of outrage and disillusionment among conservatives and leaves Washington lurching from one manufactured crisis to the next.
Here's the strange news for Republicans: These two factions are actually one and the same.
The media tend to assume that moderation and reform are essentially synonymous. But ever since Mitt Romney lost last November, most of the genuine policy innovation on the right has come from the party's populist, Tea Party-affiliated wing. The key figure has been Sen. Rand Paul of Kentucky, whose anti-war conservatism has kicked off a post-Iraq foreign policy debate that the party desperately needed, and whose forays into issues like sentencing reform and drug policy have raised the possibility of a national Republican Party that's smart as well as tough on crime.
But it hasn't just been Paul turning populism into policy. This spring, Sen. David Vitter of Louisiana, nobody's idea of a moderate, became the Republican face of a financial reform effort aimed at addressing the problem of "too big to fail" banks. And then just last week, Paul's frequent ally Mike Lee, the junior senator from Utah, took the floor at the American Enterprise Institute to offer a tax-reform proposal that would actually help middle-class families rather than mostly cut taxes on the investor class.
The Lee proposal is a particularly noteworthy breakthrough. Its centerpiece, a large expansion of the child tax credit, is an example of how social conservatism could seek to assist families instead of just lecturing them - by addressing the rising cost of child rearing, the stress wage stagnation puts on parents, and the link between family instability and socioeconomic disarray. This makes it the first major Republican tax proposal in years that actually seems tailored to contemporary challenges rather than to the economic climate of 1979.
But despite the best efforts of the Lee tax plan's admirers, the party's populists didn't make headlines last week on that issue. Instead, Lee and Paul were in the news - with the ubiquitous, less innovative junior senator from Texas, Ted Cruz - because they're part of the so-called "defund Obamacare" effort, an elaborate game of make-believe in which Republicans are supposed to pretend, for the sake of political leverage, that they'll actually shut down the government if the president refuses to go along with the repeal of his own signature legislative achievement. (How Republicans gain leverage by threatening a shutdown they'd be blamed for has never been adequately explained.)
Except that the game isn't make-believe to the many conservative voters who have been suckered into believing that the health care law could be rolled back tomorrow if only Republicans would just stop "surrendering" and use the power of True Conservatism to bend the White House to their will. This is what makes the defund movement's style of populism so depressing: In addition to throwing sand into the gears of government for no clear purpose, it's effectively deceiving precisely the voters that it claims to represent.
Hence the widespread view - shared by concerned liberals, chin-stroking moderates, and many congressional Republicans, I'm sure - that Cruz and Paul and Lee and their compatriots need to be crushed for the Republican Party to become effective and responsible again.
But the trouble is that if John Boehner and Mitch McConnell could somehow crush the populists (and they can't), they would also be crushing the best hope for conservative policy reform. That's because, for now at least, the same incentives that shape the "bad populism" of the defund movement are also shaping the "good populism" that wants to end farm subsidies or reform drug sentencing or break up banks or cut taxes on families.
Their willingness to engage in theatrical confrontations with President Barack Obama, for instance, is part of what lends figures like Paul and Lee and Vitter the credibility to experiment with ideas from outside the Reagan-era box. And their arm's-length relationship to Wall Street and K Street makes them both more irresponsible on issues like a government shutdown and more open to new ideas on taxes, financial reform, corporate welfare, etc.
Obviously Republicans should be seeking a way to have the good without the bad: the innovation without the risky brinkmanship, the fresh ideas without the staged confrontations.
But for now they're stuck dealing with a populism that resembles Homer Simpson's description of his beloved beer: It's both the cause of, and the solution to, all of their problems.
Ross Douthat is a columnist for The New York Times.