"Squad" Democrats failed on their biggest policy priority of 2021 when moderate Sen. Joe Manchin announced he won't support his party's massive reconciliation spending bill – but progressives still showed their power this year as they controlled Democrats' agenda and dominated the political conversation.

"They lost on the infrastructure-reconciliation battle. But you shouldn't think about this in terms of outcomes," R Street Institute senior fellow for governance James Wallner told Fox News. "They were able to basically take a bad situation for them… and they were able to forestall defeat for months simply by objecting… and recognizing their leverage."

Wallner said that in 2021, "Squad" members like Rep. Alexandria Ocasio-Cortez, D-N.Y., and Congressional Progressive Caucus Chair Rep. Pramila Jayapal, D-Wash., became more battle-tested as legislators, potentially setting themselves up for future success if they learn the right lessons about how "to play the game well." 

Rep. Alexandria Ocasio-Cortez, D-N.Y.

Rep. Alexandria Ocasio-Cortez, D-N.Y., speaks during a rally for immigration provisions to be included in the Build Back Better Act outside the U.S. Capitol, Dec. 7, 2021, in Washington. Ocasio-Cortez and her fellow progressives failed to enact their biggest policy goals in 2021, but they controlled the conversation in Congress. (Drew Angerer/Getty Images)

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"I think they wielded a lot of influence at various points in the year. Now, they just have to use it in the right way and create a new environment in the future so that it can be more effective," Wallner said. "If they think, 'Oh, well, we didn't win because we didn't have enough votes and we just need to defeat people like Joe Manchin…' That may be sufficient to kind of get them a little bit of what they want. But the most far-reaching stuff … that's still going to be beyond their reach because politics requires more than just winning elections."

But this year wasn't just about lessons learned for progressives and the "Squad." House Progressive Caucus Deputy Whip Rep. Ro Khanna, D-Calif., told Fox News that his caucus dictated agenda for Democrats in 2021 in a way they never did before. 

"We have a prominent seat at the table. I think a few years ago, our issues were not at the center of the discussion. Now they are," Khanna said. "Expanding Medicare to include dental, vision, hearing aid – that's something that had broad support in the caucus. Expanding having universal preschool – broad support. Having child care – broad support. Bold climate provisions – broad support. Ending forever wars – broad support."

Rep. Ro Khanna, D-Calif.

Rep. Ro Khanna, D-Calif., speaks at a climate rally with presidential candidate Sen. Bernie Sanders and Rep. Rashida Tlaib, D-Mich., in Iowa City, Iowa, Jan. 12, 2020. (REUTERS/Scott Morgan)

Khanna lauded Sens. Bernie Sanders, I-Vt., and Elizabeth Warren, D-Mass., for their presidential campaigns, which he said helped show how much public support there is for the progressives' worldview. Wallner, meanwhile, said progressives' best messenger might be Ocasio-Cortez herself. 

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"The best example of this is AOC who has an incredible amount of raw, natural political skill. And if you think back to when she first won… What does she do before she comes in? She's protesting outside Pelosi's office," Wallner said. 

"She says to herself, ‘Who’s going to be responsible for pushing the Green New Deal?' And it's like, ‘Pelosi’s got a lot of influence, so I'm going to use my leverage,' which at that point was her ability to attract attention," Wallner said. "She's a freshman back-bencher, no prior political experience, it's not like she's a former governor or something, and within a couple of months she forces the House Democrats to take up her Green New Deal and pass it." 

The Green New Deal never passed the Senate and was never signed into law. But if Ocasio-Cortez continues to exert influence the way she does, Wallner said, "then she can get like 10% of what she wants in 30 years. I mean, that's essentially worse than baseball, politics. But that's a good thing."

Speaker of the House Nancy Pelosi, D-Calif.

Speaker of the House Nancy Pelosi, D-Calif., speaks during a news conference on Capitol Hill in Washington, Friday, March 19, 2021. Pelosi was initially seen as antagonistic with the "Squad" and House progressives, but she essentially adopted their agenda wholesale in 2021.  (Chip Somodevilla/Pool via AP)

Khanna also said progressives racked up serious policy wins in 2021 on issues besides the reconciliation bill. The coronavirus stimulus bill in January, he said, was "very significant" because of the stimulus checks to Americans and the child tax credit. The infrastructure bill was important too, according to Khanna, because of its investments in removing lead pipes and rural broadband. And the withdrawal from Afghanistan, he said "is something that progressives have been pushing for." 

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But there were also some serious policy failures for progressives. They couldn't fit a minimum wage hike in the coronavirus stimulus bill. President Biden hasn't canceled student loan debt. Progressives failed to insert changes to qualified immunity into policing reform legislation before talks on that died. And efforts to pack the Supreme Court, get rid of the legislative filibuster and add Washington, D.C., as a state never gained traction. 

But Wallner said some of those goals may be achievable in the future – perhaps as early as 2022 – if progressives take away the right lessons from their successes and failures in 2021.

"Are they going to be in the right frame of mind to kind of say, ‘OK, what did we do right?’" Wallner said.