According to this Washington Post story, Democratic intellectuals William Galston and Elaine Kamarck have issued a report warning their party that moving to the left would be a disastrous electoral strategy.
The groups that were supposed to constitute the new Democratic majority in 2004 simply failed to materialize in sufficient number to overcome the right-center coalition of the Republican Party.
They note that GOP support is rising among hispanics, a group whom liberals had been counting on. Moreover, they claim that issues like health care and education, traditionally key cards for Democrats to play, have lost their power to win large numbers of votes. Finally:
On defense and social issues, "liberals espouse views diverging not only from those of other Democrats, but from Americans as a whole. To the extent that liberals now constitute both the largest bloc within the Democratic coalition and the public face of the party, Democratic candidates for national office will be running uphill."