Venezuelan lawmakers have granted firebrand President Hugo Chavez sweeping new powers, enabling him to single-handedly transform the institutions of the world's fifth-largest oil exporter.
The National Assembly, composed entirely of Chavez supporters, convened in Caracas' central Bolivar Square, shouting "long live Socialism" as they moved to allow the president to rule by decree for 18 months.
The new law -- which Chavez has dubbed the "mother of all laws" -- will give him the power to single-handedly transform state institutions in 11 key sectors, including the economy, the military, transportation, security and oil.
Some 500 Chavez supporters dressed in his signature red gathered in front of a statue of independence hero Simon Bolivar to watch the ceremony.
Chavez's political opponents have questioned the concentration of power in the hands of one man, but have not been able to block the move without representation in the National Assembly, after boycotting the 2005 elections.
Chavez has long been a thorn in the side of the United States, and US President George W. Bush voiced concern Wednesday about democracy in the Latin American country.
"I am concerned about the undermining of democratic institutions. And we're working to help prevent that from happening and strengthening democratic institutions," Bush told Fox News in an interview.
Venezuelan Vice President Jorge Rodriguez denied that Chavez' new powers made him a dictator.
"Of course we want to establish a dictatorship," he said, "the dictatorship of true democracy, and democracy is the dictatorship of everybody; all of you, all of us, together building a different country ... I hope it's established forever."
Chavez was given the same type of authority in 2001, when he decreed nearly 50 laws regulating land use, fisheries and oil and gas. The laws touched off months of protests and strikes.
Prior presidents have enjoyed similar powers, although they were limited by the 1961 constitution to a 12-month period. That constitution was rewritten after Chavez was first voted into power in 1999.
Assistant US Secretary of State for Western Hemisphere Affairs Tom Shannon said the law granting Chavez extra powers was a "tool of democracy ... allowed in the Venezuelan constitution," but what really mattered was how the law was applied.
The United States and the rest of the Americas, Shannon said during a visit to Bogota, "will keep close tabs on how this law is used."
Lawmaker Mario Isea told the single-chamber legislature that it must "accelerate" lawmaking to complete the process set in motion by the 1999 constitution: Chavez's "Socialism for the 21st Century."
Otherwise the transition toward socialism "will become drawn out, which is the reason for this law," he said.
Opposition leader Julio Borges said, "We want to open discussions on transforming the constitution by calling a national constitutional assembly, so that all Venezuelans have the right to campaign, vote and participate."
Chavez's plans include adding a stanza to the national anthem lauding Bolivar, the "liberator" of much of South America from Spain and an inspiration to most Venezuelan presidents.
With his new powers, Chavez is expected to abolish the independence of the Central Bank and to nationalize Venezuela's telecommunications and electrical industries.
He has already said Venezuela will acquire 51 percent shares in foreign oil operations.
Washington went on record Tuesday demanding to be paid damages for any nationalization of foreign-owned assets.
"We would fully expect that there be fair market compensation worked out according to the accepted norms of international legal regulation for just compensation," State Department spokesman Sean McCormack said.
Incoming US Deputy Secretary of State John Negroponte said Tuesday that Chavez was threatening democracies in Latin America.
"He has been trying to export his kind of radical populism, and I think that his behavior is threatening to democracies in the region," Negroponte told the Senate Foreign Relations Committee at a hearing to confirm his appointment as Secretary of State Condoleezza Rice's deputy.
"I do not think he has been a constructive force in the hemisphere," said Negroponte, the current US spy chief.
Chavez has plagued Washington with his fierce anti-US rhetoric, his affinity for Cuban leader Fidel Castro and his warm relations with Iranian President Mahmoud Ahmadinejad, who recently visited Venezuela.
Venezuelan lawmakers have granted firebrand President Hugo Chavez sweeping new powers, enabling him to single-handedly transform the institutions of the world's fifth-largest oil exporter.