Egypt should be a third strand of the U.S. policy of backing moderation and reconciliation. The sad fact is that the Muslim Brotherhood government of Mohamed Morsi is failing to govern in an effective, pluralistic way. A new poll by Zogby Research Services shows a dramatic decline in support for Morsi. A year ago, 57 percent of Egyptians said his victory was “positive” or “should be respected.” Today, that number is just 28 percent.

Egypt is in the political-economic equivalent of Chapter 11 bankruptcy. It survives on handouts from Qatar, a U.S. ally that unwisely supports the Muslim Brotherhood. The United States should condition economic assistance from Washington and the International Monetary Fund not on the imposition of austere reform policies (the strategy that was mistakenly adopted last year) but rather on a commitment to pluralism. The fund should require that Morsi get all major Egyptian parties to endorse the aid package, which would foster the national unity that Egypt needs.

This strategy of supporting moderation and resisting sectarianism should extend to Iraq, where the United States spent so much in lives and money. Washington still has leverage there because it supplies weapons and military training. Obama should take a stronger diplomatic stand for Iraqi unity (which means inclusion of isolated Sunnis) and against the violence that is rekindling sectarian war.