In a unanimous vote, Venezuela's national assembly, in effect, temporarily disbanded itself. Assembly President Cilia Flores was jubilant afterwards.
"Long live the sovereign nation of Venezuela," she said. "Long live Hugo Chavez. Long live socialism. Fatherland, socialism or death!"
Venezuela is now under one-man rule. Christopher Sabatini, a policy director at the New York-based Council of the Americas, says Venezuela's democratic institutions have been eroded since Hugo Chavez came to power in 1998 - and his ability to rule by decree vastly accelerates that process.
"This is the most sweeping power that has ever been given an elected president in Venezuela's history," he said. "This is the dismantling of a democracy from within."
Venezuelan legal scholars say the country's constitution, like those of many democracies, does permit the president to rule by decree. But the mechanism is intended for emergency situations, such as natural disasters, and only for brief periods of time.
"The ability to authorize exceptional powers [to the executive] exists as a legal institution," said Venezuelan constitutional law expert Gerardo Fernandez. "What does not exist in our constitution, nor in any democratic constitution, is the abandonment of the legislative process."
Is Mr. Chavez a de facto dictator? Not yet, according to Venezuelan opposition leader and magazine editor Teodoro Petkoff, who nonetheless says he is profoundly troubled by the president's expanded power.
"It opens the door to consolidate what is already a feature of the regime: autocracy," he said. "In practical terms, this is an autocratic regime. All public power is concentrated in the executive, in Chavez. It eliminates whatever vestiges may have existed of a counterweight to executive power."
For his part, Hugo Chavez downplays concerns, saying citizens can oppose any decree via a national referendum. Furthermore, he says strong measures are justified in the pursuit of a socialist future.
In a recent speech, he said, "History will absolve us. The people will absolve us. We are turning the people's dreams into reality."
In December, President Chavez easily won reelection with more than 60 percent of the vote. Observers say his popularity has been bolstered by heavy spending to provide medical care, educational opportunities, food and housing for the poor.
Yet some see trouble ahead for Venezuela - and Mr. Chavez.
Massive oil revenues have sparked a consumer spending binge at a time of declining private investment and stagnant domestic production. The end result has been shortages of basic goods and runaway inflation.
President Chavez says his "21st Century socialism" program will bring prosperity to all Venezuelans. Christopher Sabatini is skeptical.
"What 21st Century socialism means, in the Venezuelan context, is basically the indiscriminate doling out of petroleum revenue," he said.
"That is what really lubricates this entire revolution. Socialism in the past was about the means of production - improving the means of production and sharing. There is very little being produced in Venezuela. What is happening is a grand program of state patronage overseen by Hugo Chavez," he continued.
Mr. Chavez is widely expected to press for constitutional reform eliminating presidential term limits. He has pledged to remain in power until the year 2030. - VOA News