In a development that could challenge the Constitution's prohibition of any law "respecting an establishment of religion," the federal government will soon provide money directly to U.S. churches to help them pay pastor salaries and utility bills.
A key part of the $2 trillion economic relief legislation enacted last month includes about $350 billion for the Small Business Administration to extend loans to small businesses facing financial difficulties as a result of the coronavirus shutdown orders. Churches and other faith-based organizations, classified as "businesses," qualify for aid under the program, even if they have an exclusively religious orientation.
"Faith-based organizations are eligible to receive SBA loans regardless of whether they provide secular social services," the SBA said in a statement. "No otherwise eligible organization will be disqualified from receiving a loan because of the religious nature, religious identity, or religious speech of the organization."
Churches have been especially hard hit by shutdown orders, because many of them rely on weekly offerings that are no longer being collected.
"There is a portion of that revenue that just by virtue of people's habits and practices doesn't come back," Vice President Pence reportedly said in a recent conference call with U.S. pastors. In introducing the new SBA program, Treasury Secretary Steven Mnuchin said Pence and President Trump "made sure" that churches would be included in the program.
Under the Trump administration, the federal government has already been providing funds directly to churches, synagogues, mosques and other religious organizations. In 2018, the Federal Emergency Management Agency changed its rules to make houses of worship eligible for disaster aid.
The new SBA program, however, takes federal funding of religious institutions significantly further. Under the new Paycheck Protection Program, businesses with fewer than 500 employees, including faith-based organizations, are eligible to receive loans of up to $10 million, with at least 75% of the money going to cover payroll costs. The loans are in large part forgivable, so churches and other houses of worship won't have to worry about paying all the money back.
Organizations that advocate for strict church-state separation are criticizing the program.
"The government cannot directly fund inherently religious activities," argues Alison Gill, legal and policy vice president of American Atheists. "It can't spend government tax dollars on prayer, on promoting religion [or] proselytization. That directly contradicts the Establishment Clause of the First Amendment. This is the most drastic attack on church-state separation we have ever seen."
According to the First Amendment, "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof."
Advocates for government funding of religious institutions argue that denying them aid that is available to nonreligious institutions amounts to discrimination, and the U.S. Supreme Court has recently declined to challenge such support.
"In the last 15 years, the Court has moved increasingly in a permissive direction," says John Inazu, who specializes in religion and law at Washington University in St. Louis' School of Law. "There's just an increased willingness by the court to allow for direct funding of religious entities."
In prior years, the federal government has generally steered clear of such funding, although it has freed religious institutions from paying taxes and made donations to them tax-deductible.
Under existing SBA regulations, among the for-profit businesses declared ineligible for loans are those "principally engaged in teaching, instructing, counseling or indoctrinating religion or religious beliefs, whether in a religious or secular setting."
That rule, however, may soon be eliminated.
The SBA statement on the participation of faith-based organizations in the new loan program declares that some agency regulations "impermissibly exclude some religious entities. Because those regulations bar the participation of a class of potential recipients based solely on their religious status, SBA will decline to enforce these subsections and will propose amendments to conform those regulations to the Constitution."