The 1995 speech came in the context of Newt Gingrich being sworn in as Speaker in the wake of the GOP's gain of fifty-three House seats in November 1994--the same day that Mario Cuomo was defeated in the New York gubernatorial race and Tom Foley was trounced in the Washington State House race.
In this sail-against-the-wind speech, given at the National Press Club, Kennedy rejected the conventional wisdom that the 1994 elections proved the country was veering sharply to the right. He argued that the reason the Democrats lost so many elections was that they had compromised too much and shed their distinct identity. Kennedy famously declared: "If the Democrats run for cover, if we become pale carbon copies of the opposition, we will lose--and deserve to lose. The last thing this country needs is two Republican parties."
Before Kennedy made this argument in public, he delivered it in private to President Clinton, who was in a deep funk over the 1994 election and being urged by pollster Dick Morris to compromise even more and embrace portions of the Gingrich-Dole agenda.
Kennedy told Clinton to fight for incremental national healthcare, jobs and an increase in the minimum wage, and to resist making any cuts in education. He gave Clinton a memo that summed up his thinking on what a Democratic Party in power should stand for. The memo said: "Democrats are for higher wages and new job opportunities. Republicans are for cuts to pay for tax breaks for the rich."
http://www.thenation.com/doc/20020325/newfield/4