For the past six months, the bishops [the US Conference of Catholic Bishops, USCCB] have complained very publicly that the administration is anti-Catholic and biased against religious groups because it refused to renew a contract with the group to provide services to victims of human trafficking. The bishops had been administering virtually all the federal money allocated for such services, about $3 million a year, doling it out to subcontractors who served victims all over the country. The USCCB had prohibited the contractors from using the federal funds to pay for staff time to counsel victims on contraception or abortion, or to refer them for such services. (Federal money can't be used to pay for abortions except in the most extreme instances, but it can pay for contraception.)
In 2009, the ACLU sued the Department of Health and Human Services, arguing that such rules violated constitutional prohibitions on mixing church and state. Last fall, while the case was still pending, the Obama administration decided not to renew the bishops' contract, largely because the bishops refused to provide those key reproductive health services that are frequently needed by victims of trafficking. The decision set off a firestorm in Congress, where House Republicans accused the administration of bid-rigging and violating the bishops' religious freedom during a marathon oversight hearing in December.
But on Friday, a federal judge in Massachusetts essentially validated the Obama administration's position, ruling in favor of the ACLU in the lawsuit over the contract. Even though the bishops no longer have the contract, they had joined with the ACLU in asking the judge to rule in the case to settle the constitutional issues. US District Judge Richard Stearns explained why the bishops were in the wrong. He wrote:
To insist that the government respect the separation of church and state is not to discriminate against religion; indeed, it promotes a respect for religion by refusing to single out any creed for official favor at the expense of all others…This case is about the limits of the government's ability to delegate to a religious institution the right to use taxpayer money to impose its beliefs on others (who may or may not share them).
Stearns also cited an earlier Supreme Court ruling that found that the framers "did not set up a system of government in which important, discretionary governmental powers would be delegated to or shared with religious institutions." The judge's ruling is potentially a big one: It calls into question the entire basis of the federal faith-based contracting initiative, implemented by George W. Bush, which gave tremendous power to groups like USCCB over taxpayer dollars. Stearns found, in fact, that it was USCCB that was making the decisions about how the federal anti-trafficking law should be administered—a job that properly rests with the government, not the church.
Note that the Catholic Church was getting our tax money and deciding, based on their own religious beliefs, who would get the money and what they could use it for. When the Obama administration decided not to renew their contract - deciding to award the contract elsewhere - Catholic bishops saw the loss of our tax dollars to promote their own beliefs as religious discrimination!
Think about that. According to them, it wasn't religious discrimination to force their own beliefs on victims of human trafficking. No, instead, it was religious discrimination to stop giving them federal funds to do it! Crazy, huh?
No religious group has a right to federal money. Religious organizations, like any other organizations, can bid on federal contracts, but they still have to follow the law. They can't discriminate in hiring and they can't decide on their own what they'll do with that money. If you don't like those requirements, don't bid on the contract.
Judge Richard Stearns was exactly right. The separation of church and state does not discriminate against religion. Instead, it keeps the government from favoring a particular religious belief (or belief over non-belief, even). The Catholic Church is free to spend its own money as it wishes. But it doesn't have the right to spend our tax money, much as it wishes it did.
This is a slam-dunk, constitutionally. But it's still hard to say what will happen if this gets to the Supreme Court, not least because six of the nine justices are Catholic themselves. Certainly, the four Democrats on the court support the separation of church and state. But they're in the minority.