@2 Yes, but you need to start having the conversation now, so that Dems can run on it.
"direct democracy" usually refers to citizens making policy and law decisions in person, without going through representatives and legislatures. The classic example of this is the New England Town Meeting where anyone from the town who wants to show up to debate and vote on town policy can do so. Until recently, this worked for scores of communities, but low attendance at many modern town meetings has raised questions about whether they are truly democratic.
One way to counter this political bickering would be to introduce a policy of direct democracy into the houses of both congress. If both parties cannot come to an agreement, on a major political issue that affects the American people, then the bill in question, should be put forward for the American people to decide, and for the American people to have their say.
So for example on the issue of tax increases on the wealthy, if both parties cannot come to an agreement on whether taxes should or shouldn't be raised on the wealthy, then this bill should be put forward to the American people, and if the Americans were to vote in favour of Obama's bill, a tax increase on the rich, then the bill would pass and become law. If the bill didn't receive a majority vote from the people, then obviously it wouldn't pass, and that would be the end of it.