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."
MARY LOUISE KELLY, HOST:
The $2 trillion economic relief legislation enacted last month is a virtually unprecedented government intervention into the U.S. economy. One especially notable feature - taxpayer dollars will go directly to financially troubled churches and other religious organizations. That provision raises the question of whether the separation of church and state has been weakened.
Well, joining me now is NPR's Tom Gjelten. Hey there, Tom.
TOM GJELTEN, BYLINE: Hi, Mary Louise.
KELLY: Hey. So what exactly are we talking about here? How exactly will the stimulus bill aid churches?
GJELTEN: So it includes about $350 billion for the Small Business Administration to provide loans for small businesses, mainly to help them meet their payroll and pay their utility bills. And what's new is that nonprofit organizations, including churches and other religious organizations, under the legislation are actually treated as businesses. So the federal government will be able to extend these loans to churches, mainly to help them pay pastors' salaries. And some of that loan money can actually be forgiven. They won't have to pay it back.
KELLY: And how did this get in there, Tom - the government money going to churches?
GJELTEN: Well, keep in mind that churches have been really hard-hit with this coronavirus shutdown - so many of them closing. And smaller ones in particular depend on weekly offerings for their revenue. Big churches have moved more to online giving, but some small churches are actually facing bankruptcy. And this came up on a call that Vice President Pence had with pastors recently. He told them the administration's very concerned about the economic impact this is having on churches. And when Treasury Secretary Mnuchin announced this program last week, he made clear the idea of giving money to churches came straight from the White House.
KELLY: Still, though, I called this virtually unprecedented in the intro. A government paying pastors' salaries - I mean, I can't think of anything like this before.
GJELTEN: There isn't anything like this. Now, the federal government actually - at least under this administration - has made some moves toward giving money to churches. For example, two years ago, FEMA, the Federal Emergency Management Agency, changed its rules to allow churches to get grants to help them rebuild after natural disasters.
But as far as the SBA is concerned, this is totally new in two different ways. First of all, the SBA has always given money only to for-profit institutions, not nonprofits. And even where for-profit businesses are concerned, any religiously oriented business was not eligible. So this is new. And not surprisingly, it's causing some people to say the First Amendment to the Constitution is in jeopardy. That's the part that says that Congress can't establish a religion.
KELLY: Right. And to the concerns we mentioned about separation of church and state...
KELLY: ...Where does this go? Will there be a constitutional fight?
GJELTEN: You know, I raised that question with a law professor I know, John Inazu. He teaches religion law at Washington University Law School. He said you have to consider this in the context of what the Supreme Court has already been ruling in this area.
JOHN INAZU: In the last 15 years, the court has moved increasingly in a permissive direction of government funding of religious institutions. We've seen past eras where the arrangement has been different. There's an increased willingness by the court to allow for direct funding of religious entities.
GJELTEN: So - and this is just one more move in that direction, Mary Louise. But whether there'll be a court case around this program is not clear because to challenge it, somebody would have to show they have legal standing, to show they'd be injured by it. And that can be hard to demonstrate.
KELLY: All right. Thank you, Tom.
GJELTEN: You bet.
KELLY: NPR's Tom Gjelten. Transcript provided by NPR, Copyright NPR.