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Smart SBA Rules and Religious Freedom

Yes, the United States has a wall separating church and state, as well we should. But it should not be as tall and thick as it’s often made out to be. Which thankfully has been understood by the Small Business Administration in publishing rules last week regarding participation in the recently adopted federal Paycheck Protection Program (PPP), and the Economic Injury Disaster Loan Program (EIDL).

I don’t make it a practice to closely read answers to “Frequently Asked Questions” about federal rules and regs, but I did in this instance as I was intrigued by the first question and then pleased by the answer, including its directness.

Q. “Are faith-based organizations,” posed the guidance I serendipitously discovered, “including houses of worship, eligible to receive SBA loans under the PPP and EIDL programs?”

A. “Yes, and we additionally clarify that faith-based organizations are eligible to receive SBA loans regardless of whether they provide secular social services. That is, no otherwise eligible organization will be disqualified from receiving a loan because of the religious nature, religious identity, or religious speech of the organization.”

The answer to the next question is equally encouraging, in what are still the earliest days of the most disruptive national event since the Depression and World War II.

Q. “Are there any limitations on how faith-based organizations can use the PPP and EIDL loan money they receive?”

A. “Only the same limitations that apply to all other recipients of these loans . . . . The PPP and EIDL loans programs are neutral, generally applicable loan programs that provide support for nonprofit organizations without regard to whether they are religious or secular.”

As remarkable (in a good way) as these rules are, they’re not wholly surprising given conducive Supreme Court decisions over the last two decades regarding church-state relations. These include education freedom cases in Cleveland (2002) and Arizona (2011), and most importantly, a church playground case in Missouri in 2017. As for the latter, the Court ruled 7-2 that the State of Missouri could not deny public funds to Trinity Lutheran Church for resurfacing its playground just because it was a religious organization.

Had Missouri violated the Constitution’s Free Exercise Clause by trying to prevent the church from participating in a secular, neutral aid program? Writing for the majority, Chief Justice John Roberts argued that yes, it had. “There is no dispute,” he wrote, “that Trinity Lutheran is put to the choice between being a church and receiving a government benefit. The rule is simply: No churches need apply.”

Frankly, I don’t know if the SBA rules released last week are more expansive than other, apposite rules it has promulgated over the last few years, or if they represent any significant departure at all, especially given the Trinity Lutheran case three years ago. I likewise don’t know, at least at this point, if equally latitudinous rules would be as wise and prudent once Covid-19 as a major threat is past.

What I do know is what I have believed for a long time: It’s impossible to adequately help many people in need without taking greater advantage of our religious institutions and traditions, always doing so with fidelity to the First Amendment and respect for American variety.

This might have been my first American Experiment mantra going back more than 30 years, as I repeated it over and over, although I always conceived of it in terms of social services and education. It now needs to be conceived also in terms of economic recovery and keeping countless men and women employed.

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