I've had a little more time to digest the Mitch Daniels speech at CPAC and here are some thoughts,

1.  Unlike Romney and Pawlenty, Daniels did not deliver a stump speech.  In a lot of ways it wasn't even a Mitch Daniels speech.  Daniels outlined the challenges that a reformist conservatism will face in the coming decade, and discussed how to handle them.  The speech works just as well as advice to a 2016 Bobby Jindal, Marco Rubio, or Bob McDonnell presidential campaign.  The speech reminded me a lot of Reagan's 1976 address to the Republican National Convention.  There was the same sense of radical contingency and the same paucity of applause lines. He didn't want you to cheer him, he wanted you to listen and trusted that you would understand.

2.  Daniels' speech had moments of enormous prudence.  He said, "It is up to us to show, specifically, the best way back to greatness, and to argue for it with all the passion of our patriotism. But, should the best way be blocked, while the enemy draws nearer, then someone will need to find the second best way. Or the third, because the nation's survival requires it."  There is a great deal of maturity and realism there.  Conservatives are going to have to compromise with each other in crafting a "realistic, actionable program of fundamental change, one that attracts and persuades a broad majority of our fellow citizens" and when we think we have that, there will have to be even more compromises.  There will be setbacks, and circumstances will foreclose certain policy options.  Sticking to principle while maintaining relevance is going to an enormous challenge. 

3.  There is even more (and painful) realism when he says " But we, too, are relatively few in number, in a nation of 300 million."  Yes.  We are far fewer than you would think from looking at the 2010 election results.  Most Americans (and maybe most self-identified conservatives) have never heard, in any detail, why turning Medicare into a defined contribution program is a good idea.  

4.  This is a good approach to the expected liberal attacks on conservative reformism: " When they call the slightest spending reductions "painful", we will say "If government spending prevents pain, why are we suffering so much of it?" And "If you want to experience real pain, just stay on the track we are on." When they attack us for our social welfare reforms, we will say that the true enemies of Social Security and Medicare are those who defend an imploding status quo, and the arithmetic backs us up."  Well it sounds good anyway. 

5.  Good for him for putting earmarks in perspective.  Do you hear him John McCain?

6.  This is important and not spoken of often enough: "We should address ourselves to young America at every opportunity. It is their futures that today's policies endanger, and in their direct interest that we propose a new direction."  Very true and talking to the young is one of the most intractable problems of the center-right in the present media environment.  Obama's policies are an unspeakably bad deal for the young, but they are also his strongest demographic.  And don't just blame the kids (and their slightly older siblings.)  Conservatives are doing a lousy job talking to them. Conservatives are best able to get their messages out in the right-leaning media, the traditional news media, and ads.  The right-leaning media is the friendliest format but its audience skews older.  The traditional news media is less friendly to conservative ideas, but smart and disciplined conservatives can use the conventions of the traditional news media to get their message out.  The problem is that the audience for this media also skews older.  Ads are fine, but most commercials are thirty seconds to one minute and are heavily dependent on familiarity with certain ideas, political buzzwords and personalities.  Many political commercials are just nonsense to many younger voters.  It isn't that young people are rejecting a reasonable, relevant, and intelligible conservative message.  They have literally never heard such an argument made at any length in language they understand.

7.  Daniels wrote and thought the heck out of that speech and the above excerpts don't do it justice, but his language could use some work.  Most of the people he needs to win over don't know what "summoned to General Quarters" is supposed to mean.