Ezra Klein makes the case:
Perhaps this is just the logical endpoint of two years spent arguing over what Barack Obama is — or isn't. Muslim. Socialist. Marxist. Anti-colonialist. Racial healer. We've obsessed over every answer except the right one: President Obama, if you look closely at his positions, is a moderate Republican from the early 1990s. And the Republican Party he’s facing has abandoned many of its best ideas in its effort to oppose him.
If you put aside the emergency measures required by the financial crisis, three major policy ideas have dominated American politics in recent years: a health-care plan that uses an individual mandate and tax subsidies to achieve near-universal coverage; a cap-and-trade plan that attempts to raise the prices of environmental pollutants to better account for their costs; and bringing tax rates up from their Bush-era lows as part of a bid to reduce the deficit. In each case, the position that Obama and the Democrats have staked out is the very position that moderate Republicans staked out in the early '90s — and often, well into the 2000s.
I made a similar argument following the lame-duck session, and the truth is that this description could be applied to other elements of Obama's moderate policy platform, including immigration and nuclear proliferation:
The Obama administration's agenda, by and large, reflected a liberalism chastened by past failures and willing to endorse more market-based solutions to problems. Rather than simply dismissing conservative criticism, liberals internalized it -- and modified, narrowed and adjusted their goals accordingly. Where conservatives said liberals were too ambitious, liberals sought more focused solutions. Where conservatives said the market would work better than government, liberals tried to find a market-based path to the same goal. When conservatives pointed out that judicial decrees, even in matters of civil rights, are no substitute for the legitimacy conferred by legislative action, liberals took it to heart.
Of course, as liberals moved right or recognized conservative criticism as legitimate, conservatives mostly leveled the same tired epithets at everything liberals tried to do. A more limited DREAM Act with harsher behavioral restrictions became "amnesty," Reagan's arms treaty would lead to nuclear annihilation, and a national version of Romneycare became the twilight of freedom in America. In the hands of liberals, conservative policy ideas become dangerous, elaborate plans for the unmaking of the country.
I'm not sure really what accounts for Republicans moving so far right over the years, but at least part of it is philosophy. The kind of old-school civic responsibility that would have motivated moderate Republicans to seek market-based solutions to issues both liberals and conservatives could agree were actual problems has been largely replaced by one that is purely reactionary and rejects even empirical realities that are associated with being "liberal," climate change being the obvious example. Health care would be the other one -- the difference between Republicans of the 1990s and now is that today Republicans don't even regard people going without health insurance as an actual problem worth solving. The argument now is that people who need government assistance are weak parasites, and if liberals would only let conservatives snatch away the social safety net, they'd sprout wings and fly instead of hitting the ground.