The most commonly cited issue is comprehensive immigration reform; Republicans of various stripes now seem to think that this is a very important issue, and their change in tone is understandable. But the fact of the matter is that the Republican partiy already has a very good blueprint for appealing to Hispanics: George W. Bush. They are also unlkely to follow this blueprint.
It's telling that one of the recent troughts in Hispanic support for Democrats is the two Bush elections (peaks include 1996, when Pat Buchanan's primary success showed a virulently anti-immigrant GOP) . Obviously, Bush was something of a moderate on immigration -- like Obama, he gave oral support to comprehensive immigration reform but made no decisive steps toward it (until Obama decided to stop deporting students who happen to be hear illegally, his immigration policy was basically Bush's). But then, so did John McCain, and McCain still lost the hispanic vote by wide margins.
The fact of the matter is that immigration is not the most important issue for Hispanic voters: healthcare and the economy are, and hispanics greatly preferred Obama's health care policies. This makes sense; the Hispanic population is in the same position as many European immigrant groups were during the New Deal in the 30's - working low wage jobs, and unable to afford things like education and health care without government assistance. Thus, like Italians in 1932, Hispanics seem to support an activist government -- it's not that they 'want free stuff', its that cutting medicaid is going to be unpopular with a population whose kids are dependent upon this program for healthcare, unlike seniors and those with cushy employer health plans.
And I think that this is the key to much of Bush's success among hispanics: he declared a ceasefire in the republican war against the safety net, and actually helped the working class by slashing their taxes. But these policies won't fly in today's GOP.
Bush shored up his right wing with tax cuts, social conservativism and a strident pro-war stance; the fact that he wasn't gung ho about destroying the New Deal was forgivable because he was pro-life and anti-gay, and was our 'war president' in our struggle against evil-doers. The GOP base retains its Islamaphobia, but not its interventionist impulses (see the flip-flopping on Libya), and Gay marriage is a losing battle that won't turn out people like it once did. Abortion is still important to movement conservatives, and they seem more fanatical than ever about it, but being anti-government is now as strong a litmus test as being pro-life (I will look at this phenomenon later). The Tea Party is not just an anti-Obama booster campaign for the GOP, but an intra-party movement for purity, purifying the party not just of 'RINO's' like Dick Lugar, but from the taint of Bush's 'compassionate conservatism' and its failure to destroy the welfare state.
What this all adds up to is a GOP that is less flexible than it was in 2000, and one that has thus ruled out the policies that it would need to embrace to be competetive with Hispanics and other minorities.
*And trounced they were, decisively losing the Senate, the electoral college and the popular vote, and retaining their house majority only through horrific gerrymandering.
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