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It was long a concept that the Democratic party and the Republican party could be replaced by two new parties, a Conservative party and Liberal party, where the Democratic Conservatives and Republican Conservative would unite in one party, and the Democratic Liberals and Republican Liberals would unite in one party.
I believe Franklin Roosevelt had this idea for realigning the party system. I believe Richard Nixon did as well (though Nixon could have just been intending to take in all the conservatives into the GOP and push out the Liberals). I also believe there was some talk about a new Conservative party occurring in the 60s when the South and more blue collar people started to show interest in George Wallace and voted for him in the presidential elections.

This happened mostly in the OTL, but it was simply the existing parties changing and evolving, and the Democrats becoming the party for Liberals (and no longer the big tent for blue collars), and the Republicans the party for Conservatives (and no longer the big tent for white collars). That is not so (insert the word here) as the Democrats and Republicans going away and two publicly declared new parties created from their ideologically in sync elements.

So the challenge here is to see the Democrats and Republicans (one or both) dissolved, and evolved and replaced by a Liberal and/or Conservative party.
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