Egypt remains in turmoil after its president decreed last Thursday that he was no longer subject to the laws of his country—giving himself power over the judiciary and other branches of government.

Egyptian President Mohamed Morsi made his lunge for power shortly after helping to broker a fragile ceasefire in Gaza between Israel and Hamas, the extremist offshoot of his own Muslim Brotherhood. The Muslim Brotherhood’s agenda includes imposing Sharia (Islamic law), curbing the rights of women and religious minorities, abandoning Egypt’s 1979 peace treaty with Israel, and advancing Islamist causes around the world.

Reuters reports that about 370 people have been injured in clashes between protesters and police since Morsi issued his decree last Thursday. The president is meeting with judges today, supposedly on an agreement to amend his decree, but protesters say they want to see it reversed completely.

Morsi has set Egypt on a troubling new foreign policy course since coming to power in June. His government has distanced itself from Washington while cozying up to China, improving relations with Iran, and violating its peace treaty with Israel.

He has escalated Egypt’s cooperation with Hamas, the Palestinian branch of the Muslim Brotherhood that controls Gaza and remains adamantly committed to Israel’s destruction. Morsi’s Islamist-dominated government has cracked down on Egypt’s media and has announced that Egyptian journalists will be put on trial for “insults” to the president. Morsi’s government is systematically clamping down on Egyptians’ political, social, and cultural freedoms. Yet the Obama Administration naively continues to court it as a partner.

Morsi may calculate that his help in administering Band-Aids to the festering Israeli-Palestinian conflict will make the United States and others who give aid to Egypt think twice before trying to reverse his power grab.

The Obama Administration was working on an aid package to Egypt that includes forgiving approximately $1 billion of Egypt’s debt to the United States. This is in addition to about $1.5 billion in annual U.S. foreign aid.

When protesters tore down the American flag at the U.S. embassy in Cairo on September 11, Morsi’s public reaction was nonchalant. Instead of immediately denouncing the attack and taking action to upgrade security around the embassy—as Libyan and Yemeni leaders have done after similar events—Morsi waited a day before casually issuing a mild rebuke to the rioters via Facebook.

The Obama Administration should leverage U.S. aid to pressure the Egyptian leader to respect the rule of law, abide by the decisions of Egypt’s courts, and abandon his drive for absolute power. Morsi has exploited external crises in the past to advance his own ambitions. In August, he used a Sinai terrorist attack that killed Egyptian soldiers as a pretext to purge the Egyptian army of its top Mubarak-era holdovers. Now he has done the same with the judiciary.

Egypt’s judiciary also has pushed back against Morsi’s power grab. The Supreme Council of the Judiciary denounced Morsi’s unilateral assertion of power over the judiciary as “an unprecedented attack on judicial independence.” The Judges Club, an association of judges made up of many appointees by the Mubarak regime, called for a strike by courts across Egypt.

But the judges alone will not be enough to reverse Morsi’s power grab. The key vote will be wielded by the armed forces. Morsi appears confident that he can count on support from key military leaders, whom he hand-picked after purging the top ranks of Mubarak loyalists in August.

While the army’s ultimate verdict on Morsi’s power grab is not yet apparent, Egypt’s investors voted with their wallets and withdrew their money from Egypt’s stock market, which plunged almost 10 percent on Sunday.

The big losers here are the Egyptian people. Their aspirations for freedom and democracy will likely get lost in the shuffle as Egypt’s “Arab Spring” descends into an Islamist winter. But the United States and its allies—particularly Israel—will also find their national interests undermined by the anti-Western drive of Morsi’s Muslim Brotherhood.

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