The Department of Justice’s Office of Legal Counsel published a legal opinion in August titled “Constitutionality of Religious Restrictions on the Use of Federal Funds.”
The Aug. 25 memorandum concluded that federal rules restricting faith-based organizations from using government grants are unconstitutional because they discriminate against religion without a compelling government interest, violating the free exercise clause.
The opinion was published in response to the Department of Health and Human Services asking “whether the religious restrictions applicable to HHS are required by the Establishment Clause; and if not, whether they are constitutional under the Free Exercise Clause,” which were submitted to the legal counsel’s office on July 1.
In 2019, the legal counsel had published an opinion, “Religious Restrictions on Capital Financing for Historically Black Colleges and Universities,” which determined barring loans for facilities used for worship specifically did not violate the Free Exercise Clause. The 2026 opinion withdrew the office’s 2019 position.
Mike Berry, senior counsel at First Liberty, said “For far too long, people of faith have had to tolerate religious discrimination in government funding. Hopefully, this is a giant first step towards ending that discrimination.”
“The First Amendment does not require the government to bankroll prayer, preaching or proselytizing,” said FFRF Co-President Annie Laurie Gaylor.
The three cases that forced the change
The questions from HHS arose in light of three cases: Espinoza v. Montana Dept. of Revenue (2020), Carson v. Makin (2022) and Kennedy v. Bremerton School District (2022), all of which ruled in favor of religious freedom.
In Espinoza v. Montana Dept. of Revenue (2020), Montana created a tax-credit scholarship program that allowed families to send their children to private schools — including religious ones.
However, Montana’s Department of Revenue invoked the “no-aid” clause, adopting a rule to prohibit scholarship money from going to religious schools. The Supreme Court ruled the “no-aid” clause was used to discriminate against religion, violating the Free Exercise Clause.
Rural Maine towns created a “town tuitioning” program that allowed students from small towns to attend private or public schools elsewhere. Maine restricted eligibility in the program to nonsectarian schools. Carson v. Makin (2022) was appealed to the Supreme Court, where the justices ruled a state can’t exclude religious institutions from a public benefit program.
In Kennedy v. Bremerton School District (2022), the justices ruled that a public school assistant football coach was exercising his First Amendment rights when praying at the 50-yard line after a football game.
What comes next
City Journal highlighted Loffman v. California Department of Education following the Office of Legal Counsel’s published opinion. The authors wrote, “Under existing federal law, when a public school district fails to provide a disabled child with an education that serves his or her needs, parents may place the child in an appropriate private school and seek reimbursement for the cost of the education that public schools failed to deliver.”
The California Assembly approved legislation that would reduce the amount of money reimbursed to families who chose to send their children to a religious school.
The authors wrote, “If a child needs story time, and the school reads a Bible story, California now says that it will reduce the reimbursement. Religion, and religion alone, is singled out for disfavor.”