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A new religion debate: Is it wrong for the government to send stimulus money directly to churches?

The coronavirus pandemic disrupted the status quo when it comes to church-state separation

SHARE A new religion debate: Is it wrong for the government to send stimulus money directly to churches?
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Jovita Carranza, administrator of the Small Business Administration, speaks about the coronavirus stimulus funds issue in the James Brady Press Briefing Room of the White House in Washington on Thursday, April 2, 2020, as Vice President Mike Pence, President Donald Trump listen.

Alex Brandon, Associated Press

SALT LAKE CITY — The current economic downturn is hurting all types of organizations. Should the government treat sacred and secular businesses the same when it offers relief?

The Trump administration is doing so under the latest federal stimulus package, which set aside $350 billion for small business loans. Churches and charities can access the funds under the same terms as for-profit businesses, a policy that some say is unlawfully forcing taxpayers to subsidize acts of faith.

“We’re seeing the government pay directly for religious activity, and that’s not allowed under the (Constitution’s) establishment clause,” said Alison Gill, the vice president of policy for American Atheists.

Other legal experts characterize the administration’s actions differently, arguing that the government is right to help churches outlast state-mandated social distancing rules.

“What the government is doing here is making sure people can still exercise their right to worship,” said Stanley Carlson-Thies, founder and senior director of the Institutional Religious Freedom Alliance in Washington, D.C.

People on both sides of the debate agree the government has more work to do. In its next stimulus package, Congress can provide additional, less controversial forms of support to faith-based organizations and clear up some of the confusion surrounding existing funds.

Stimulus funds for churches

Although churches and charities operate differently than for-profit businesses, they’re facing similar consequences due to COVID-19. Less money is coming in, bills are piling up and pandemic-related restrictions stand in the way of many potential solutions.

The coronavirus “has had a big effect on churches,” Carlson-Thies said.

Nearly all houses of worship have stopped holding in-person worship services and moved as many activities as possible online. This shift, as well as the economic downturn caused by the coronavirus, has fueled a significant drop in financial donations.

“Half of (Protestant) pastors (52%) say giving has decreased compared to earlier this year,” including 30% who report that it’s dropped by more than 50%, according to a survey released last week from LifeWay Research.

The decrease in donations hurts more than pastors. Churches are now having a harder time funding charitable programs and paying a variety of employees, from janitors to child care providers, religious leaders said.

Lawmakers acknowledged these struggles while finalizing how funds provided by the Coronavirus Aid, Relief and Economy Security (CARES) Act would be paid out. Vice President Mike Pence, Sen. Marco Rubio, R-Florida, and others promised to ensure faith-based organizations could access small business loans.

Last week, these promises became reality when the Small Business Administration released proposed guidelines for the stimulus funds. Lenders were told to treat charities and churches, which are usually ineligible for federally guaranteed small business loans, the same as other, more traditional applicants.

“Faith-based organizations are eligible to receive (small business) loans regardless of whether they provide secular social services,” the Small Business Administration explains in its resource guide for churches.

Under a new paycheck protection program, nearly all types of employers with fewer than 500 employees can receive up to $10 million to pay salaries, mortgage interest or rental payments and utility bills for eight weeks. The low-interest loan is forgivable so long as businesses only use it for eligible expenses and current employee salaries are maintained.

”What the program tries to do is keep everybody, including houses of worship, from being harmed by these things (like bans on group gatherings) we had to do on behalf of the whole society,” Carlson-Thies said.

Religious freedom conflict

Despite being built around a widely shared goal, the paycheck protection program concerned many religious freedom advocates when details were first released.

Organizations like American Atheists argued it was wrong to allow forgivable loans to fund pastor salaries, while others claimed the money came with too many strings attached.

“A lot of the normal protections for religious organizations (participating in government funding programs) weren’t present at first,” said Justin Butterfield, deputy general counsel for First Liberty Institute, a Texas-based law firm focused on religious freedom issues.

The initial program rules said loan recipients needed to obey a wide range of nondiscrimination protections. Employers would be ineligible if they hired or fired people based on sex, religious beliefs or sexual orientation.

“If you’re a church, it’s imminently reasonable to be able to select your pastor on the basis of religion. Many faiths also limit certain positions to men,” Butterfield said.

After First Liberty and other organizations shared their concerns, the Small Business Administration quickly adjusted its approach. Churches and charities can now receive faith-based exemptions to many nondiscrimination rules, Carlson-Thies said.

“A lot has been done to make it possible for houses of worship and other faith-based institutions to take the money without suppressing their religious character,” he said.

These changes satisfied one group of critics, but they only added to the frustrations of other advocacy groups. It’s unprecedented for taxpayer money to be used in this way, Gill said.

“We’re not objecting to the fact that churches can receive funding. It’s that loans being used for religious for religious purposes are able to be forgiven,” she said.

Such a use of public money violates the Constitution’s establishment clause and puts religious institutions at risk of increased government interference, argues an April 7 letter to the Small Business Administration from the Interfaith Alliance, National Council of Jewish Women and four other faith-based groups.

“Existing federal statutes, regulations, and policies include numerous safeguards to ensure public funds do not support religious activity,” they wrote.

Carlson-Thies doesn’t dispute that the paycheck protection program is a first-of-its-kind opportunity for religious institutions. Faith-based organizations can typically only access public funds if they’re helping the government to carry out a secular mission.

“If the government wants something good to happen, it will offer grants or subsidies to the organizations that do those good things,” Carlson-Thies said.

However, he believes there’s a legal precedent for church participation in the stimulus loans. In contexts like the military and prison system, the government is allowed to pay religious leaders to offer spiritual support to people in need.

“The Department of Defense pays people to authentically deliver religious activities because they’ve got soldiers and sailors they’re keeping from going to their house of worship,” Carlson-Thies said. “They’re not establishing religion, they’re just keeping people from being harmed.”

The stimulus funds are meant to make up for damage caused by social distancing rules, not expand religious offerings across the country, wrote Holly Hollman, the associate executive director of the Baptist Joint Committee for Religious Liberty, in her analysis of the paycheck protection program.

“The purpose of the program is to maintain employment during an economic and health crisis in the country, not to advance or prefer religion,” she said.

Gill agreed that the government is allowed to fund religious resources in places like prisons, but argued the current restrictions on religious practice come nowhere close to the situation in those other contexts.

Because of the coronavirus, “the government is stopping churches from gathering, but not from reaching out to members” in other ways, she said. “It’s exercising much less control over (religious activity) than the military does.”

What to expect next

Gill’s organization and others are still considering whether to file lawsuits challenging the current structure of the paycheck protection loans. In the meantime, they’re encouraging Congress and the Small Business Administration to make adjustments to the current stimulus program and any future funding bills.

“This is a critical moment to put in basic church-state protections,” Gill said.

She’s not advocating for churches and charities to lose access to paycheck protection loans. Instead, she wants the portion of the funds used for clergy paychecks and sanctuary upkeep to be considered a nonforgivable loan.

“What we’re asking for is that the portion used for inherently religious activity like clergy salary be required to be paid back,” Gill said.

Carlson-Thies is also hoping that Congress isn’t done working on the controversial stimulus loans, although for different reasons than Gill. He believes the initial $350 billion in funds for small businesses will run out before many churches complete their applications.

President Donald Trump has already requested $250 billion in additional paycheck protection funds, and national nonprofit leaders are calling for some stimulus money to be allocated specifically for charities in need of financial support.

Neither of these proposals would resolve the current debate over government funding for faith groups, but both would enable more religious organizations to access financial relief, Carlson-Thies said.

If Congress wants to pursue a less controversial solution, lawmakers could include more charitable giving incentives in the next stimulus bill, he added. Already, taxpayers have been given the opportunity to deduct up to $300 in donations from their taxable income when they take the standard deduction.

“The good thing about charitable giving incentives is that it encourages people to be generous and the money comes without any church-state strings,” Carlson-Thies said.