In case there was any doubt, the results of Saturday's South Carolina primary proved there's a proxy war going on in the Republican Party. While casual observers may see a battle between former Massachusetts Governor Mitt Romney and former Speaker of the House Newt Gingrich, the real fight is between a party establishment that believes only a moderate can win in November and conservatives who want to block a moderate from winning the nomination.

Continued...

After the first three official contests, three different candidates have scored a victory and the fourth showed well enough to stay in the fight. Far from the coronation many anticipated, the GOP primary process is turning into a battle of wills for the party's soul and the possibility of a brokered convention is becoming more real every day. After Saturday night's results were announced, former Republican National Chairman Michael Steele said the chances of the race going all the way to Tampa without a clear winner are now "50/50."

But in this standoff between the establishment and the conservatives, the establishment may have just blinked. It's highly doubtful that after a decades-long relationship with Mr. Gingrich, party leaders past and present will suddenly embrace the volatile and ethically challenged former speaker. But it is possible that after recent debate stumbles by Governor Romney, his poor showing in South Carolina and his dropping poll numbers in Florida; they may offer a new candidate behind which the party could unite.

Last week's announcement that Indiana Governor Mitch Daniels would deliver the GOP response to President Barack Obama's State of the Union Address was not surprising. As a successful fiscally conservative governor, Mr. Daniels is certainly qualified to discuss the economic topics expected in the president's speech and he offers a distinct contrast between his own successes and Mr. Obama's economic failures. But what is surprising are rumors that the governor's comments may contain the announcement that he is reconsidering a run for the presidency. These rumors have prompted speculation that Daniels may soon replace Romney as the establishment's choice and while many conservatives consider Governor Daniels not socially conservative enough, his executive governing experience and indisputable fiscal conservatism may just make him acceptable to them too.

Of course conventional wisdom says it's far too late for a new candidate to enter the race even if he is conservative and establishment-approved. You can almost hear the chants of "not enough money" and "not enough organization" from the media pundits and other so-called experts. But if Mr. Gingrich, who had the shakiest campaign machine of all the candidates, can come up with an overwhelming win in South Carolina; maybe that particular nugget of conventional wisdom doesn't apply in this election cycle.

Besides, with the party establishment and grassroots conservatives behind him, a Daniels campaign could catch up fast in terms of both fundraising and organizing.