Election Day was all of the following for Republicans: a pounding, a thumping, a butt-whupping, a stomping, a drubbing, a shelling, a flogging, a spanking and an embarrassing beat-down. But the election wasn't a loss for the conservative ideals of low taxes, traditional values and limited government.

The election was a loss on the issues of congressional ethics and Iraq policy, as well as an indication of general dissatisfaction with President Bush. Republicans have hit a fork in the road.

They need to decide whether they want to go down the tried-and-true road of the conservatism that brought them a huge victory in 1994 or the liberal road containing more federal spending on education, amnesty for illegal immigrants and increasing unemployment generated by raising the minimum wage. If Republicans don't embrace their conservative side, they may lose more seats and the presidency in 2008, thus relegating themselves to minority-party status for years to come.

One thing the GOP lacked in this election was a positive message for the future. It's not so much that Republicans lost these elections; polling in key states indicates that the lack of progress in the war in Iraq caused the American people to fire Republican candidates in numerous states.

Exit polls indicate that in the key Senate battleground states of Montana, Virginia and Missouri, the war in Iraq was a tie-breaker that led to a Senate shift in power from Republican to Democrat. The voters did not feel good about signs of progress in Iraq. All of these elections would have had different results if the American people did not cast their votes on the basis of general dissatisfaction with the ruling party.

Conservatism is at a crossroads. According to a CNN poll immediately before the elections, the American people indicated that they believe the federal government is doing too much. Conservatives should build on that by embracing initiatives to limit the size and scope of government.

Social Security, Medicare and Medicaid by themselves are projected to exceed 18 percent of gross domestic product by 2040; therefore the government must rein in entitlements. Conservatives should promote plans to study waste and fraud in these entitlement programs as a first step toward capping expenses that are on pace to bankrupt the American taxpayer.

Tax simplification is another issue conservatives should be discussing. It's time to put forth aggressive ideas, such as a flat tax or another means to scrap the complicated tax code. Conservatives should push the popular idea of traditional marriage and other ideas that the average American family can embrace and support. Furthermore, part of the new conservative revolution should be to embrace our long history of legal immigration and fight any efforts to grant amnesty to the estimated 12 million illegal immigrants living in our nation today.

On the defensive side, conservatives need to fight any effort to create a socialized health-care system, which is one of the potential agenda items of the new majority. Heath care consumes approximately $2 trillion of our economy. Market-based initiatives, including health savings accounts, should be part of any plan to lower the cost of health care for the average American family.

We'll also need to oppose tax increases if we want to protect our growing economy. Lower tax rates have given us 4.4 percent unemployment, a soaring Dow Jones and decreasing energy prices. Conservatives should fight any effort to raise taxes.

Finally, the war on terror has brought in a new era of government monitoring of potential terrorist activities. Conservatives need to promote initiatives that protect the civil liberties of Americans while making us feel safe in a post 9/11 world.

Back in 1979, Ronald Reagan announced that, "A troubled and afflicted mankind looks to us, pleading for us to keep our rendezvous with destiny; that we will uphold the principles of self-reliance, self-discipline, morality and, above all, responsible liberty for every individual that we will become that shining city on a hill."

All that remains true today. The world looks to the United States for leadership, and Americans are looking to conservatives for the ideas that will guide us through the troubled years ahead. When the dust settles, the 2006 elections will be seen as a big loss for Republicans, but a big win for conservatives.

Brian Darling is director of U.S. Senate relations at The Heritage Foundation, a leading Washington-based public policy institution.