Anti-Morsi protesters hold a banner reading "Mohamed Morsi Mubarak." Flickr/Gigi Ibrahim.The February 2011 ouster of President Hosni Mubarak was hailed as an opportunity for the convergence of interests and values in the U.S.-Egyptian relationship. But less than two years later, as it formulates a response to the latest move of Egypt's first democratically elected president, Mohamed Morsi, Washington’s interests are again in competition with its values.

Morsi, who hails from the politically dominant Muslim Brotherhood, may not be a moderate. However, as his involvement in last week's Israel-Hamas ceasefire made clear, his desire for a stable Middle East serves U.S. regional-security interests. Morsi may not like Israel, and his Brotherhood may share Hamas’s opposition to peace, but he defied expectations—and disappointed many Egyptians—by leaving Egypt’s peace treaty with its neighbor intact during the recent Gaza conflict.

Perhaps the international praise for his mediation gave Morsi the confidence to issue a sweeping Constitutional Declaration, but the optics could not have been worse for the United States. In the preceding days, President Obama had spoken with Morsi numerous times, and Secretary of State Hillary Clinton was in Cairo on November 21 to announce the ceasefire.

The following day, the Egyptian president declared that his writ was “final and binding and cannot be appealed by any way or to any entity.” Morsi and his supporters claimed this move was to “protect” democracy from a meddling judiciary held over from the Mubarak regime. Ominously, though, Article VI of the Constitutional Declaration contained no checks on Morsi’s new powers: “The President may take the necessary actions and measures to protect the country and the goals of the revolution.”

As Egyptian public squares descended into increasingly violent demonstrations for and against the president’s action, segments of Egypt’s civic forces cried foul: claiming U.S.-Brotherhood collusion, a charge the U.S. Embassy, via social media, spent the better part of the weekend fighting.

On Friday, the Department of State released a brief statement. Morsi’s declarations “raise concerns for many Egyptians and for the international community.” The statement, in the name of the spokeswoman, not the Secretary, reiterated the principles the administration hopes to see in Egypt’s future constitution; it did not criticize the move, name Morsi or mention the Egyptian presidency.

This statement, in other words, was only slightly harsher than the message the Obama administration sent to the Supreme Council of the Armed Forces (SCAF), the military junta that ruled Egypt from Mubarak’s ouster to Morsi’s inauguration. Similarly, during the blatantly rigged 2010 elections, which preceded the January 25 Revolution, the State Department spokesman also noted “cause for concern.”

In the early months of the Arab Awakening, President Obama laid out overarching principles his administration would stand for in the transitioning countries of Middle East. By March 2012, however, the State Department made its priorities clear when Secretary Clinton, releasing U.S. aid, affirmed that Egypt was standing by its peace treaty with Israel and waived congressional conditions for democratic progress “on the basis of America’s national security interests.”

Although Egypt’s Morsi has proven he can maintain U.S. national-security interests, the United States must break the cycle of protecting its short-term interests at the cost of its values. Indeed, while Egypt is in a desperate economic position, the United States has the opportunity to support both.

The United States should not be publicly silent and should not equivocate when the Egyptian leadership makes moves clearly at odds with democracy. Young Egyptian civic activists have called for the United States to continuously stand by its values, and failing to do so disappoints the very population Americans looked at so hopefully during Egypt’s revolution.

At the same time, the current developments in Egypt are the messy struggles of internal dynamics and power politics. The U.S. administration must be wary of making public threats or ultimatums that are unlikely to help the situation. Indeed, such grandstanding may harden positions and open the opposition to being tagged as foreign agents. While those who share our values must believe we stand with them, the majority of useful U.S. action needs to be—and hopefully is—taking place behind the scenes.

The administration has consistently argued against linking U.S. aid to Egypt to political developments; but this allows for Congress, which controls the budget, to play bad cop. This routine failed to work last year because no one in Egypt—certainly not the military—believed the threat.

Though slightly more credible in the coming fiscal year because of antipathy to the Brotherhood in the U.S. House, the State Department and Defense Department can signal that they are looking for alternative methods of maintaining previously signed defense contracts—and not harming any U.S. jobs—without the materiel necessarily making it to Egypt. This could spur the Egyptian military, which has been largely silent on Morsi’s recent declaration, to weigh in.

More immediately, earlier last week Egypt reached an agreement with the International Monetary Fund (IMF) on a $4.8 billion loan. On Monday, State Department spokeswoman Victoria Nuland continued to play good cop, saying the IMF loan—as well as other U.S. assistance—should go forward. At the same time, she betrayed some hesitation, “I think everybody’s watching now that this current set of issues has a democratic resolution.”

In private discussions with its Egyptian interlocutors the Obama administration should be much blunter. Indeed, Ahram Online reported on Sunday that a senior IMF official believed the Constitutional Declaration and the ensuing demonstrations “could bring into question the stability of state institutions and raise doubts that could delay the loan.”

The Obama administration should speak up for U.S. values and work towards their implementation, and not only because it is the right thing to do. Protecting U.S. security interests at the expense of stable democratic development in Egypt could, in the longer term, harm those very interests. The Muslim Brotherhood has already grown more ambitious as it has consolidated power, breaking promises it made early in Egypt’s transition.

Without proper constitutional and political checks this is sure to continue. President Morsi may not tear up the treaty with Israel today. But as Brotherhood Deputy Guide Khairat al-Shater reportedly said, just wait until Egypt’s economy is on track and its military is ready.

Zack Gold is a Washington-based Middle East analyst focusing on U.S.-Egyptian relations. Follow him on Twitter:@ZLGold.