The empirical evidence is well known. More than 80 percent of Americans believe the nation is heading in the wrong direction. Democrats have steadily maintained the 10 percentage point lead in voter preference they gained two years ago. And President Bush's job performance rating is stuck in the low 30s, a level of unpopularity that weakens the Republican case for holding the White House in 2008.

There's another piece of polling data that is both intriguing and indicative. In a Wall Street Journal/NBC survey last month, John McCain fared better with Republican voters (84 percent to 8 percent) than Barack Obama did with Democrats (78 percent to 12 percent). McCain was also stronger than Obama among independent voters (46 percent to 35 percent).

These are terrific numbers for McCain. But they aren't enough. In the overall match-up, McCain trailed Obama (43 percent to 46 percent). The explanation for this seeming paradox is quite simple: The Republican base has shrunk. In 2008, there are fewer Republicans.

McCain down," says a Republican strategist, and it could doom his chances of winning the presidency. The strategist fears Republican leaders and McCain campaign officials "don't realize the trouble they're going to be in."  . . .  

Pollster Frank Luntz . . . believes the Republican image has gotten worse. "It used to be that Republicans won [in polls] on economic and values and foreign policy issues," he says. "Democrats won on quality of life. Now Democrats are winning on everything."  . . .  

"There's never been a better climate, since 1932, for Democrats," says Bob Beckel, a Democratic consultant. "And the political environment usually prevails. It's impossible for me to conclude anything other than it's going to be a Democratic year." 

Beckel cites, in particular, a huge increase in Democratic voters in 2008 that has widened the party's advantage in registration by millions of voters. "Republicans are facing a surge in new Democratic voters, and they are facing defections in a number of states," he says. 

Indeed they are, which is why Republican expectations for 2008 are modest. There are three major goals: Hold the White House, avert sweeping House losses, and keep the Senate defeats to four or fewer. 

McCain must overcome a "generic" presidential preference for a Democratic president of 51 percent to 33 percent (in the WSJ/NBC poll). He'll have to appeal more strongly than Obama to independents, moderates, and soft Democrats. The good news for McCain is that 20 percent of Clinton supporters in primary exit polls and other surveys say they'll vote for him over Obama.

Oil rose above $126 a barrel for the first time Friday, bringing its advance this week to nearly $10, as investors questioned whether a possible confrontation between the U.S. and Venezuela could cut exports from the OPEC member. Gas prices, meanwhile, rose above an average $3.67 a gallon at the pump, following oil's recent path higher. 

On Friday, The Wall Street Journal published a report that suggested closer ties between Venezuelan President Hugo Chavez and rebels attempting to overthrow Colombia's government. Chavez has been linked to Colombian rebels previously, but the paper reported it had reviewed computer files indicating concrete offers by Venezuela's leader to arm guerillas. That appears to heighten the chances that the U.S. could impose sanctions on one of its biggest oil suppliers. 

"If we put on sanctions, I'm sure Chavez would threaten to cut off our oil supply," said Phil Flynn, an analyst at Alaron Trading Corp. "Obviously that would have a major impact on oil prices."