The strength of Sen. Bernie Sanders' campaign is causing palpable panic among Democrats from battleground states and swing districts who worry they’ll lose with a democratic socialist at the top of the ticket.

Moderate lawmakers sounded the alarm bells Thursday at the Capitol after Sanders won New Hampshire and finished strong in Iowa, heading into the March contests with money and momentum.

“It’s bad,” said one freshman Democrat from a swing district. “We are having conversations about how to deal with this.”

“If [Sanders] is the nominee, we lose,” another Democrat told Fox News.

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Two other vulnerable Democrats said a Sanders nomination would almost certainly cede their states to President Trump and could hurt their down-ballot races for the House and Senate.

Exacerbating their concerns is the dismal finish for former Vice President Joe Biden, who had staked his candidacy on being able to beat Trump in swing states and appeal to more centrist voters.

Now Democrats are grappling with the possibility that the fractured electorate could propel Sanders to the nomination.

Several Democrats interviewed by Fox News requested to remain anonymous to speak freely about their concerns and admitted they didn’t know whether they’d try to actively block Sanders or take another path to spin his candidacy into a viable one.

“We’re just starting,” said one Democrat.

But Sanders, who has a devoted group of young supporters, made the case Thursday he can beat Trump because he can motivate unconventional voters to head to the polls.

“We are the strongest campaign to defeat Trump, because the way you defeat Trump is we're having the largest voter turnout in the history of this country,” Sanders said Thursday at the Capitol. “And I think if you look at Iowa, you find that we saw a 33 percent increase in voting for younger people voting at a higher rate than ever. In New Hampshire, you saw us doing extremely well in working-class communities. And if we are going to defeat Trump as we must.”

Sanders made the case that he can build a winning coalition.

“We're going to have to get working-class people back into the Democratic Party. We're going to have to get young people a lot more involved in the political process. And it's never been the case before we're gonna have to expand minority voting," Sanders said. "And I think we have a campaign to do that.”

Sanders now tops the national polls, and his supporters were feeling confident. Rep. Ilhan Omar, D-Minn., called the Vermont independent’s campaign so far “excellent.”

With the slide of Biden, there’s uncertainty over who could be the strongest alternative for more moderate voters.

Political newcomer Pete Buttigieg, the former mayor of South Bend, Ind., won the most delegates out of Iowa and finished just behind Sanders in New Hampshire, while Sen. Amy Klobuchar of Minnesota beat expectations in New Hampshire for a third-place finish.

Meanwhile, former New York City Mayor Michael Bloomberg has pumped millions into building a campaign that can compete starting on high-stakes Super Tuesday, March 3, and backers believe he's well-positioned to take the reins if Biden fails to mount a comeback in upcoming contests in Nevada and South Carolina.

Rep. Dan Kildee, D-Mich., hasn’t endorsed in the race and said any of the leading candidates could win in swing-state Michigan. Asked if Biden had the best chance, Kildee said, “That’s more of a question now because you’ve got to demonstrate strength somewhere. In the abstract, he did because he feels like one of us in a lot of ways, but, you know, the New Hampshire performance was concerning.”

Rep. Brenda Lawrence, D-Mich., backed Sen. Kamala Harris for president, but said she’ll await Super Tuesday to make another endorsement. So far though, she’s been impressed with the “strong” campaign that Bloomberg has set up in her home state.

Meanwhile, Biden backers went on offense arguing a Sanders nomination would be devastating for Democrats running on the same ticket for Congress, Senate and other local races.

“Elected officials across the country understand there will be down-ballot carnage to the Democratic Party if we elect the wrong person,” Rep. Cedric Richmond, the Biden campaign’s co-chair, said, according to Politico. “If Bernie Sanders were atop of the ticket, we would be in jeopardy of losing the House, we would not win the Senate back.”

Democrats took back the House in the 2018 election by flipping GOP-controlled districts. Now, these same vulnerable Democrats worry that their voters couldn’t get behind the more radical policies of a socialist, like "Medicare-for-all," and could even stay home.

They plan to combat a Sanders’ nomination by trying to hyper-focus on local issues. But one lawmaker conceded that it would be hard to compete with the Sanders narrative and the reverberations of impeachment.

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Even as the alarm bells sounded among some Democrats, other Democratic sources reminded that only a tiny percentage of delegates have been awarded. “It’s still so early,” said one source. “We just have to win."

Multiple Democrats who could face competitive races this fall declined to speak on the record about what a Sanders nomination and the impacts of impeachment could mean for their candidacies. Fox News is told no formal warning went out to vulnerable Democrats to watch what they say to the press, or to avoid the press altogether. But some Democrats approached by Fox News and other outlets were reticent or uncomfortable with the topic.

Two freshmen Democrats who flipped seats from red to blue in 2018, Reps. Cindy Axne, D-Iowa, and Lucy McBath, D-Ga., would not even engage a clutch of reporters just off the House floor who wanted to ask questions.

Rep. Raúl Grijalva, a progressive leader in the House, however, tried to quiet the storm.

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“I think it’s premature for anybody to start pulling their hair out,” said Grijalva, D-Ariz., who backs Sen. Elizabeth Warren for president. "I think it’s going to be a close race. If it’s Bernie I don’t think it’s necessarily a deficit to retaking the White House.”

Warren says she’s a capitalist, while Sanders has proudly embraced socialism for decades. Trump and the GOP have sought to paint the election as a vote against socialists and Rep. Alexandria Ocasio-Cortez, Rep. Omar and their “squad.”

But Grijalva said labels can work both ways.

“How can Republicans continue to cling on to the reelection campaign of Trump when many of us feel that the policies he’s instituted have divided this country, and many people think that him and Stephen Miller are racist,” Grijalva said of the senior White House aide. “I mean labels are labels.”

Fox News' Jason Donner contributed to this report.