As the New Year dawns, both major American political parties have grounds for optimism. Republicans obviously have an opportunity in 2016 to win a “trifecta,” controlling both chambers of Congress and the White House. Their House control is probably invincible until the next round of redistricting; they won just enough Senate seats to give them a good chance to survive a terrible 2016 Senate landscape; and at least some political scientists and pundits would put a thumb on the scale for Republicans in being able to succeed a less-than-heavily-popular two-term Democratic president.

The big question for Republicans is whether their much-delayed “rebranding” will actually have to take place in order to do well in a presidential cycle with its larger youth and minority voting strength, or whether the small gains they made in 2014 in elements of the “Obama coalition” will stay with them, particularly without Obama on the ballot. Luckily for Republicans, they will get a lot of credit for “moving to the center” if they manage simply not to move to the Right. The nomination of Jeb Bush, for example, long considered his family’s one true “movement conservative,” would be greeted by the mainstream media as a near-Rockefeller moment for the GOP—assuming, of course, Jeb can get through the primaries without signing every rightwing litmus test handed to him.

It might help if Republicans could find a “Sister Souljah” moment to distance themselves from elements of their own coalition whose attitudes towards minority voters are toxic. They are letting one pass by this very week, allowing (or so it appears) Rep. Steve Scalise of Louisiana to retain his House leadership post after some rather unconvincing rationalizations about a speech he made to a white supremacist group in 2002. There’s not much question Republicans will be playing with fire in 2015 by expressing violent opposition to a an executive order on immigration that is proving to be wildly popular among Latinos. And the GOP’s image is going to be largely held hostage to the dynamics of the Republican presidential nominating contest, with all its base-pandering pressures. If the so-called Republican Establishment really is as powerful as it often claims to be, 2015 would be an excellent time to unite around a presidential candidate who is not likely to make the party’s electoral challenge even more difficult.

There are two obvious grounds for Democratic optimism going into the new year: we’re entering a presidential cycle where turnout patterns are vastly more favorable for the Donkey Party, and said party has pretty much hit bottom in non-presidential contests, its “exposure” in Republican-leaning seats having been reduced to the near-vanishing point even as Republicans seem to have overreached. For both reasons, it’s hard to imagine Democrats failing to pick up House and Senate seats in 2016.

Moreover, even if the economic recovery of 2014 did not happen rapidly or thoroughly enough to help Democrats in November, it’s finally beginning to have an impact, as reflected in more positive assessments of the economy and in the president’s suddenly revived job approval rating (back up to 48% at present).

The three main challenges to Democrats in the next cycle are interrelated: re-establishing their high-turnout, high-percentage performance among “Obama coalition” voters that appeared in 2008 and 2012 but not in 2010 and 2014; stopping the bleeding among white voters, particularly non-college educated voters and seniors; and negotiating the transition from one party leader to the other in a way that improves the Democratic appeal.

To put it more mechanically, Democrats need a nominee capable of taking credit for Obama’s accomplishments that are important to “Obama coalition” voters while convincing others a change of policies and emphasis is in the offing, most likely an emphasis on reducing economic inequality without sacrificing economic growth. While Republicans may very well inadvertently help Democrats in achieving all their demographic targets—certainly minority voters—they could also spurn younger white women with their unmodified opposition to reproductive rights and seniors with a overreaching return to “entitlement reform.” But whether the Democratic presidential nominee is Hillary Clinton or someone else, the key to success may ultimately depend on Democrats finally convincing Americans they know how to negotiate economic globalization in a way that does not mean a slow displacement of the middle-class voters they need.

Yes, there’s grounds for optimism, and for caution, in both parties as we enter 2015.

Ed Kilgore is the principal blogger for Washington Monthly’s Political Animal blog, Managing Editor of The Democratic Strategist, and a Senior Fellow at theProgressive Policy Institute. Earlier he worked for three governors and a U.S. Senator. He can be followed on Twitter at @ed_kilgore.