1980–present

With the ascendancy of the Republicans under Ronald Reagan, the Democrats searched for ways to respond, but were unable to succeed by running traditional candidates, such as former Vice President and Democratic presidential nominee Walter Mondale who lost to Reagan in the 1984 presidential election. Many Democrats attached their hopes to the future star of Gary Hart, who had challenged Mondale in the 1984 primaries running on a theme of "New Ideas", and in the subsequent 1988 primaries, he became the de facto front-runner and virtual "shoe-in" for the Democratic presidential nomination, before his campaign was ended by a sex scandal. The party nevertheless began to seek out a younger generation of leaders, who like Hart had been inspired by the pragmatic idealism of John F. Kennedy.
Arkansas governor Bill Clinton was one such figure, who was elected President in 1992 as the Democratic nominee. He labeled himself and governed as a "New Democrat". The party adopted a centrist economic but socially progressive agenda, with the voter base after Reagan having shifted considerably to the right. In an effort to appeal to both liberals and fiscal conservatives, Democrats began to advocate for a balanced budget and market economy tempered by government intervention (mixed economy), along with a continued emphasis on social justice and affirmative action. The economic policy adopted by the Democratic Party, including the former Clinton administration, has been referred to as "Third Way". The Democrats lost control of Congress in the election of 1994 to the Republican Party. Re-elected in 1996, Clinton was the first Democratic President since Franklin Roosevelt to be elected to two terms. Following twelve years of Republican rule, the Democrats regained majority control of both the House and the Senate in the 2006 elections.

Barack Obama, 44th President of the United States (2009–2017)

In the wake of the 2001 World Trade Center terrorist attacks and with growing concern over global warming, some of the party's key issues in the early 21st century have included the methods of how to combat terrorism, homeland security, expanding access to health care, labor rights, environmentalism, and the preservation of liberal government programs.^[28] Barack Obama won the Democratic Party's nomination and was elected as the first African American president in 2008. The Democrats gained control of both chambers of Congress in the wake of the 2007 economic recession. The Democratic Party under the Obama presidency moved forward reforms including an Economic Stimulus package, the Dodd-Frank financial reform act, and the Affordable Care Act. In the 2010 elections, the Democratic Party lost control of the House and lost its majority in state legislatures and state governorships. In the 2012 elections, President Obama was re-elected but the party kept its minority in the House of Representatives, and in 2014 the party lost control of the Senate for the first time since 2006. After the 2016 election of Donald Trump, the Democratic Party transitioned into the role of an opposition party and currently hold neither the Presidency nor a majority in the House or Senate.
According to a Pew Research poll, the Democratic Party has become more socially liberal and secular compared to how it was in 1987.^[29] Based on a poll conducted in 2014, Gallup found that 30% of Americans identified as Democrats, 23% as Republicans, and 45% as Independents.^[30] In the same poll, a survey of registered voters stated that 47% identified as Democrats or leaned towards the party; the same poll found that 40% of registered voters identified as Republicans or leaned towards the Republican party.