Obama's revision of a 2001 Bush order establishing an Office of Faith-Based and Community Initiatives does recognize that some aid to religious groups might blur the separation of church and state. The president directs what will now be called the White House Office of Faith-Based and Neighborhood Partnerships "to ensure that services paid for with federal government funds are provided in a manner consistent with fundamental constitutional commitments guaranteeing the equal protection of the laws and the free exercise of religion and prohibiting laws respecting an establishment of religion."
What's missing is a clear statement that faith-based services that accept federal money may not discriminate in hiring on the basis of religion. Rather than flatly prohibiting such discrimination, Obama's initiative establishes an advisory council, which will refer legal questions about "programs and practices" to the attorney general. That seems to contemplate a case-by-case approach that could confuse some applicants for federal aid and encourage others to hire only church members and take their chances.
A ban on discrimination in hiring is admittedly inconsistent with one rationale for faith-based programs: that a pervasively religious program might be especially potent in transforming the lives of addicts, prison inmates or teenagers involved in risky sexual relationships. Indeed, the message that sobriety or persevering in a troubled marriage pleases God might well be more effective than a secular appeal for a change in behavior. But government underwriting of such activities violates the 1st Amendment's prohibition of an "establishment" of religion. That may be why Bush's original executive order described aid to faith-based charities as a way to "level the playing field" between religious and nonreligious charities.
Long before Bush's order, charities operated by religious organizations received federal support. Such aid is unobjectionable and even desirable where believers are impelled by their faith to feed the hungry or heal the sick. As the Epistle of St. James says: "I will show thee my faith by my works." But in exchange for government funds, faith-based programs must not impose a religious test on either those they serve or those they hire. Catholic Charities, for example, informs prospective employees that they will be considered without regard to religion. Obama needs to make it clear that other beneficiaries of federal funds will make the same commitment.