The sting of Republican electoral defeats still fresh, the GOP chairman suggested Thursday the party has strayed and challenged it to refocus on core principles and reform.

"We work for the people," Ken Mehlman, the outgoing chairman of the Republican National Committee, said in a speech to a meeting of GOP governors. He reminded the crowd that "good policy makes good politics — and, for Republicans, this must be a time for self-examination when it comes to our policy."

In a disastrous midterm election year for the GOP, Republican candidates lost races across the country and at all levels of government, prompting party leaders to do some soul searching as they seek a winning strategy for 2008 and beyond.

Democrats captured control of the House and Senate, took a majority of governors' posts and gained a decisive edge in state legislatures as Republicans failed to withstand fallout from a sour national mood created by the war in Iraq and scandals in Washington.

"Our nation is stronger and better when Republicans are the party running the government. But, ladies and gentleman, our party should never be the party of government, of Washington, of earmarks, of bureaucracy," Mehlman said, implying that's what the GOP had become at times — or at least what voters perceived on Nov. 7.

Three weeks after the losses, about a dozen GOP governors gathered in this Miami suburb for their association's annual meeting. The 2008 election loomed large, given that the outgoing RGA chairman is Massachusetts Gov. Mitt Romney, who is considering running for president. Arkansas Gov. Mike Huckabee, also weighing a bid, attended the meeting.

Not to be forgotten, Sen. John McCain, R-Ariz., who is widely considered the one to beat and has created a presidential exploratory committee, held a reception for those attending RGA events.

Despite the undercurrent of the presidential race, the focus remained on what went wrong in 2006 and how to ensure the GOP recovers.

"To some degree, we've lost our way," acknowledged Gov. Sonny Perdue of Georgia, the incoming RGA chairman, who said the party must implement policies that are in line with its principles.

Romney, for his part, suggested that lawmakers in Washington — not GOP governors — are the ones who need to get back on track, saying: "If the Republican Party, nationally, is looking for a place where it can gain a bit of a guiding post, it would be by seeing the successes of Republican governors."

He also took a swipe at Republicans on Capitol Hill for promising to hold down spending but then beefing up budget bills with millions of dollars for pet projects. "There's nothing that's going to yield a bigger swat — or a thumping if you will — than saying one thing and doing another," Romney said at a news conference, using the spending issue as an example.

Later, in a speech that was warmly received, Romney promoted more power for the people in what could end up being a campaign theme should he run for the White House.

"If you believe, as I do, that our source of strength is our people, then when America faces a new generation of challenges, like we do today, you don't look to government," he said. "You look to make the people stronger."

Mehlman, who will leave his post when his term ends in January, said the party's most important task in the coming two years will be to rekindle a spirit of reform — changing its governing while staying true to the party's long-standing ideals of limited government, individual freedom and a strong national defense.

"It must be our party that faces the new challenges of the 21st century head-on. It must be our party that recommits itself also to being the party of change. Because it's the Republicans who are the party of reform on all these issues — health care, job creation and the war on terror," he said.

Republicans, Mehlman said, must take power out of Washington and give it back to Americans, arguing that Democrats won't.

"They believe that government and Washington has the answer to every question, the solution to every problem," he said. "We, as Republicans, don't believe that. But, if you think about it, sometimes over the past two years, we've behaved as if we do."