Statement of the Hon. Robert C. Scott, a Representative in Congress from the State of Virginia

Testimony Before the Subcommittee on Human Resources and
Subcommittee on Select Revenue Measures
of the House Committee on Ways and Means

Hearing on H.R. 7, the "Community Solutions Act of 2001"

June 14, 2001

Religiously affiliated organizations, including Catholic Charities, Lutheran Services, Jewish Federations and a vast array of smaller faith-based organizations now sponsor government programs. And contrary to President Bush's recent assertions, I am unaware of anyone who opposes these organizations operating public programs and providing services. They are funded like all other private organizations are funded: they are prohibited from using taxpayer money to advance their religious beliefs and they are subject to civil rights laws.

The President visited a Habitat for Humanity site recently highlighting his faith initiative, yet even the Habitat's founder indicated that they are thriving under current provisions without Charitable Choice.

One of the reasons supporters often cite a need for Charitable Choice is so that small religious providers will be able to participate in government grant programs. Contrary to these assertions, Charitable Choice does absolutely nothing to increase participation by small religious organizations in social service programs. They still have to navigate the grant process- writing and submitting a grant; setting up accounting procedures; administering the program, etc. Small religious organizations as well as small neighborhood organizations will continue to face difficulties without adequate technical assistance irrespective of Charitable Choice on the law books.

In reality, Charitable Choice seeks to alter the long standing relationship between church and state by allowing the sponsors of federally funded programs to advance their religion during the programs and by allowing discrimination in employment paid for with federal dollars.

The issue concerning the President's Faith-Based Initiative and HR 7 is not if religious organizations should participate or if we should expand community efforts to deal with serious social problems- we should and they do now. There is broad bipartisan agreement on this. Rather, the fundamental difference in what Charitable Choice does differently from current law is two things: allows proselytization during the program and employment discrimination with federal funds.

Before we can intelligently discuss the pro's and con's of Charitable Choice, we must first get a straight answer to a fundamental question: are you funding the faith or not?

At a Notre Dame commencement speech, the President recently said "[g]overnment should never fund the teaching of faith, but it should support the good works of the faithful." Furthermore, the legislation itself prohibits federal funds being used to pay for proselytization. But if government is not "funding the faith", then there is no need to discuss the preservation of the religious character of the sponsoring organization; there is no need to provide separate, secular services elsewhere; there is no need to discriminate in employment; in fact, there is no need for Charitable Choice. If the government is not funding the faith, organizations can receive funding just as Habitat for Humanity does now, without Charitable Choice.

Unfortunately, the provision in Charitable Choice guaranteeing the right to retain the religious character of the sponsor also guarantees that the program will promote religious views. And the prohibition against using the federal funds for proselytization does not prevent volunteers from taking advantage of the captured audience and converting the federal program into a virtual worship service.

Furthermore, many of the supporters of Charitable Choice acknowledge that the religious experience is exactly what is being funded. At a forum a few months ago, my friend Senator Santorum, the main Senate sponsor of Charitable Choice, criticized me for not recognizing that with some drug rehabilitation programs "religion here is a methodology". And John DiIulio indicated in an interview with the Associated Press in April that while "it was 'more appropriate' for pervasively religious programs to be paid for with vouchers but if they want to apply for direct grants, 'fine'". Also, in April an ad hoc of 35 different conservative organizations formed to support the President's Faith-Based Initiative issued a statement of principles that included the provision that "...a faith-based organization that accomplishes socially beneficial purposes through a pervasively religious approach may receive funding for other purposes equivalent to what other faith-based or secular government grantees receive." ⁽¹⁾ At recent Congressional hearings, sponsors have explained that their programs are successful because of the religious nature of the program. And my House colleague, Congressman J.C. Watts, who has been one of the earliest supporters of Charitable Choice, has previously introduced versions of Charitable Choice for drug treatment programs where beneficiaries can be forced to participate in religious activities as a requirement for receiving publicly funded services. (See HR 3467, 104^th Congress) In addition, he and others have pointed that programs, like Victory Fellowship where religion is the course of treatment for substance abuse, as exactly the kinds of programs Charitable Choice is designed to fund.

Yet, how are we to fit these statements with the President's statement "[g]overnment should never fund the teaching of faith, but it should support the good works of the faithful"? Or with Department of Justice testimony last week before the Subcommittee on the Constitution that absolutely no religious activity, funded privately or not, could occur during the government funded program?

Chairman Herger and Chairman McCery, you have to answer the question: are you funding the faith or not. If not, then you don't need Charitable Choice. If so, then we have to candidly address the Establishment Clause of the First Amendment implications of having government officials pick and choose between religions to see which faith will be advanced during a government sponsored program.

There is another important policy question that has to be addressed: should we allow employment discrimination in a federally funded program?

There was a time when some Americans, because of their religion, were not considered qualified for certain jobs. In fact, before 1960 it was thought that a Catholic could not be elected President. And before the civil rights laws of 1960s, people of certain religions routinely suffered invidious discrimination when they sought employment. Sixty years ago this month, President Roosevelt established the principal in an executive order that you cannot discriminate in government defense contracts on the basis of race, religion, color or national origin, and the civil rights laws of the 1960s outlawed schemes which allowed job applicants to be rejected solely because of their religious beliefs.

Some of us are frankly shocked that we would even have to debate whether sponsors of a federal program can discriminate in hiring. But then we remember that passage of the civil rights laws in the 1960s was not unanimous, and it is clear that we now are using Charitable Choice to redebate the passage of basic anti-discrimination laws. I believe that publicly funded employment discrimination was wrong in the 1960's and it is still wrong.

Some have suggested that organizations should be able to discriminate in employment to select employees who share their vision and philosophy. Under current civil rights law you can discriminate against a person based on their views on environment, views on abortion or gun control. You can also select staff based on their commitment to serve the poor or whether you think they can have compassion to help others kick drugs. But because of a sorry history of discrimination against certain Americans, we have had to establish "protected classes" and under present law you cannot discriminate against an individual based on race, sex, national origin, or religion.

The current exemption under Title VII for religious organizations is a common sense provision which allows religious organizations to discriminate based on religion for hiring purposes. For example, when a Catholic church hires a priest, they can of course require that the job applicant be Catholic. This exemption, however, was intended to apply to the use of private funds of the religious organization, and it was never expected to apply to the use of federal funds.

In addition to the insulting prospect that otherwise perfectly qualified job applicants in a federally sponsored program would be denied employment because of their religion, there are other civil rights considerations, in terms of gender and race, that should be considered. The courts have read a constitutionally based 'ministerial exception' into Title VII that excludes some employment decisions by religious organizations from all of the provisions in Title VII - thus allowing discrimination on the basis of race, gender and national origin by religious organizations. It is unclear how the "ministerial exception" would effect the civil rights of an applicant for a job paid for with federal funds under Charitable Choice.

Chairman Herger and McCrery, I would submit the testimony of Wade Henderson of the Leadership Conference on Civil Rights before the Senate Judiciary Committee as part of my testimony here. His testimony outlines the significant civil rights problems contained in HR 7 which I recommend for the Committee's review before proceeding further with this legislation.

Some will suggest that Charitable Choice is no different than present law which allows religiously affiliated hospitals and colleges to receive public funds and discriminate in some of their high level positions. Siegel v. Truett-McConnell College, Inc. provides the distinction for us. The plaintiff argued that the college received substantial funds from federal and state sources, such as Pell grants, and therefore was not entitled to the Title VII exemption. The Court ruled in favor of the college noting that "there was no 'direct federal or state subsidy...' and that '[t]he government does not directly pay for any one teacher's salary, including Mr. Siegel's.'" The court went on to distinguish this case involving indirect benefit (where students choose their college) from a direct benefit (where government provides a direct contract for services). If Charitable Choice were a voucher program (where the drug addict selects which program to participate in), rather than a grant program (where the government selects the program), the analysis might be different. But there is no question that there should be no discrimination in programs selected by the government to provide services.

There are other policy considerations that have received little debate or review but are nonetheless worthy of the Committee's attention as it relates to Charitable Choice proposals.

Preemption of Local and State Nondiscrimination Employment Laws:

Notwithstanding the Title VII problem in HR 7, there remains language in the bill that supporters of Charitable Choice have argued would override local and state nondiscrimination employment laws.

"Question 1: Do FBOs have to comply with state and local nondiscrimination laws?

Yes, except where an employment practice is motivated by the FBO's sincerely held religious beliefs. States and municipalities often have nondiscrimination laws and procurement policies enacted pursuant to governmental spending power. When these spending-power laws do not permit FBOs to select staff on the basis of faith commitments, the laws are not enforceable against FBOs acting pursuant to charitable choice contracts or grants. This is because the federal statutory guarantees in §604a that promise to protect the 'religious character' of FBOs preempt contrary provisions in state and local laws. " ⁽²⁾

State Constitutional Preemption:

H.R. 7 would preempt many state constitutional provisions and laws. The provisions of the Watts-Hall Bill mandating the granting of funds to religious organizations and allowing such organizations to discriminate in employment on the basis of religious tenets are in clear conflict with many state constitutional, statutory, and regulatory provisions which prohibit states from granting funds to or contracting with organizations that are sectarian in character or that discriminate in employment for religious reasons on the basis of religion or other characteristics. "Even without an express provision for preemption . . . state law is naturally preempted to the extent of any conflict with a federal statute." Crosby v. National Foreign Trade Council, 530 U.S. 363, *373 (2000). The Supreme Court "will find preemption where it is impossible for a private party to comply with both state and federal law." Id.

Preemption of State/Local Contracting Requirements Reflecting Diversity:

Proponents of Charitable Choice have also argued that its provisions, including those contained in HR 7, override state or local requirements for culturally diverse providers.

"Q. May a state or locality require that the governing board of a faith-based provider reflect the ethnic, gender, or cultural diversity of the community or beneficiaries?

A. No. Such matters of internal governance are under the control of the faith-based organization." ⁽³⁾

Privatization Issue:

As we begin to implement existing programs containing Charitable Choice and contemplate adding this provision to other federal programs, we must contemplate the privatization issues that may arise as more and more government services are contracted out to private providers, including those who are religious. For example, efforts are usually made to place dislocated public workers with the private contract providers. With Charitable Choice, however, workers who are otherwise qualified may not be eligible for employment at the private religious provider due to differences in religion.

Professional Licensing Standards:

Licensing is generally the purview of states and localities. Previous versions of Charitable Choice have sought to override state educational and licensing requirements for drug counselors of religious providers. While those attempts have been largely rejected, there still remains the issue of licensing across the multitude of programs. Religious providers performing privately funded services have often been accorded exemptions from various state and local licensing requirements. A review should be undertaken to see what exemptions are in place at the state and local level and if those exemptions would remain in place when operating a public program.

From these and other issues raised by the testimony you will hear today, Charitable Choice presents us with an array of difficult legal, ethical, and policy issues. More fundamentally though, Charitable Choice represents an historic reversal of decades of progress in civil rights enforcement. The President and supporters of Charitable Choice have promised to invest needed resources in our inner cities, but it is insulting to suggest that we cannot get those investments, unless we turn the clock back on our civil rights.

Chairman Herger and McCrery, I thank you for holding this hearing and thank you for your courtesy in allowing me to participate.

1. Free Congress Foundation, Press Release on "FCF's Marshner Chairs New Coalition to Support Faith-Based Initiatives," April 12, 2001

2. Esbeck, Carl H. "Isn't Charitable Choice Government-Funded Employment Discrimination," Christian Legal Society.

3. "The Rules of Section 104 of the 1996 Federal Welfare Law Governing State Cooperation with Faith-based Social-Service Providers," The Center for Public Justice, 1997.

Statement of Wade Henderson, Executive, Leadership Conference on Civil Rights

The Leadership Conference on Civil Rights is the nation's oldest, largest, and most diverse coalition of organizations committed to the protection of civil and human rights in the United States. Since its establishment in 1950 by A. Philip Randolph, Arnold Aronson, and Roy Wilkins, three civil rights leaders who would eventually receive the Presidential Medal of Freedom, the Leadership Conference has promoted the passage, and monitored the implementation, of laws designed to achieve equality under law for all persons in the United States. LCEF was founded in 1969 as the education arm of the civil rights coalition and continues to fill that role today.

Today, the Leadership Conference consists of over 180 organizations working in concert to advance the cause of equality. Our coalition includes groups representing persons of color, women, labor organizations, persons with disabilities, older Americans, gay men and lesbians, major religious groups, and civil liberties and human rights interests. It is a privilege to represent the civil and human rights community in addressing the Committee today.

We would like to make clear at the outset of this testimony that the Leadership Conference approaches this issue with great respect for the many religiously-affiliated organizations, such as Catholic Charities USA, United Jewish Communities, and Lutheran Social Services, that have long received federal, state, and local funds to serve important needs in our communities. The charitable choice provisions under consideration today will have no effect on the important work of these well-known organizations. Moreover, to my knowledge, none of the Leadership Conference members that oppose charitable choice are seeking to change, in any way, the operations of the several religiously-affiliated groups that already participate in federal programs.

We also strongly support the fundamental principle that our nation's privately-funded religious organizations -- our churches, synagogues, mosques, and other houses of worship -- should always enjoy the constitutional freedom to pursue their religious missions through their ministries to our communities. The Leadership Conference and many of its members have supported religious freedom with our own long history of working toward laws that protect religious exercise, including the right of each person to be free from discrimination based on religion. Further, I would add that, as with the religiously-affiliated groups, no one opposed to charitable choice is seeking to change the way any of these privately-funded religious groups operate.

The Leadership Conference also would like to take this opportunity to offer its commitment to work with members of the Senate Judiciary Committee to find a better, non-discriminatory way to ensure that federal money goes to whichever organization can best serve a community's needs and is willing to abide by the laws that apply to federal contracts and grants. We understand the frustration of the many smaller privately-funded service providers, both religiously-affiliated and secular, who feel excluded from federal programs because the regulatory hurdles seem too high. We believe that we can find an appropriate way to bring these groups into federal programs, even as we remain committed to civil rights protections and other necessary safeguards. We believe that such a "win-win" solution is possible, and is well worth all of our efforts to find it.

CHARITABLE CHOICE: A NEW THREAT TO CIVIL RIGHTS

The Leadership Conference believes that the employment provision of charitable choice threatens a cornerstone principle of our nation's civil rights laws, i.e., that federal funds generally will not go to persons who discriminate against others. It is hard to overstate the importance of our national commitment to this principle. Not only should all of us be free from discrimination by the government itself, but we also should have the assurance that our government is not providing federal dollars to programs that discriminate against others.

Ironically, we are defending the principle that the government should not fund persons engaged in religious discrimination almost sixty years to the day it was first enunciated. On June 25, 1941, President Franklin D. Roosevelt signed the first Executive Order, No. 8802, prohibiting federal defense contractors from discriminating based on race, religion, color, or national origin. Not only was the Roosevelt Executive Order the beginning of a long national commitment to barring federal funds to most persons who discriminate against others, it also was the first national victory of the modern civil rights movement.

Sixty years ago, despite the increase in employment as the nation prepared for World War II and provided defense materials to the rest of the free world, minorities were largely excluded from the nation's economy. The use of federal funds as the source of all of the new economic activity compounded the injustice of discrimination. Recognizing the special harm of federal dollars going to persons who discriminate, President Roosevelt agreed to sign a landmark executive order prohibiting federal defense contractors from discriminating based on race, religion, color, or national origin.

In subsequent executive orders, President Roosevelt covered all federal contracts, including non-defense contracts; and Presidents Truman, Eisenhower, Kennedy, and Johnson expanded the protections. The current executive order is Executive Order No. 11246, which has been in effect since 1965. The executive orders also spawned scores of nondiscrimination provisions that bar discrimination in specific federal programs, and influenced the development of agency rules that prohibit discrimination by federal contractors and grantees.

It is this fundamental principle of non-discrimination, reflected first in these executive orders, and later, in the host of civil rights statutes that ban discrimination by recipients of federal funds, that we are committed to protecting here today. Based on our review of the development of charitable choice legislation, the Leadership Conference has concluded that charitable choice threatens to erode that fundamental principle by allowing federal funds to go to persons who discriminate in employment based on religion.

The core of the charitable choice provisions of the faith-based initiative is its anti-civil rights employment provision. For example, the charitable choice provision in S. 304, the "Drug Abuse Education, Prevention, and Treatment Act of 2001" provides that the Title VII exemption for religious organizations -- which permits religious employers to prefer members of their own religion -- "shall not be affected by the religious organization's provision of assistance under, or receipt of funds from, a program" described in the legislation. Allowing Title VII's religious exemption to be applied to staffing decisions by federally-funded religious organizations would result in a harmful exception to the longstanding principle that federal funds generally may not go to persons who discriminate.

The objective of charitable choice is to push aside every other statutory and regulatory protection against religious discrimination. The sixty years of developed civil rights protections against federal funds going to persons who discriminate in employment based on religion will have no place in the newly authorized programs. Thus, federally-funded religious organizations participating in these programs could fire, or refuse to hire, anyone who did not belong to the employer's religion.

Charitable choice could further undermine the nation's civil rights protections by allowing federally-funded religious organizations to require employees to adhere to the religious practices of the federally-funded religious organization. For example, several courts have interpreted the religious organization exemption in Title VII to allow a religious employer to require employees to adhere to the teachings and tenets of the religion. The "religious practices" requirement could create a conflict with the enforcement of civil rights laws protecting persons against discrimination on the basis of characteristics such as race, gender, pregnancy status, sexual orientation, or marital status.

These are conflicts that the country can and should avoid. Our nation already went through over a decade of litigation to determine whether Bob Jones University's claim that it had a religious right to discriminate against persons on the basis of race overrode the federal government's interest in denying preferred tax status to groups that discriminate based on race. Bob Jones Univ. v. United States, 461 U.S. 574, 604 (1983). Although Bob Jones University lost that case, we know that other religious institutions have claimed a religious basis for discriminating against others based on gender and pregnancy status, see Boyd v. Harding Academy of Memphis, Inc., 88 F.3d 410 (6th Cir. 1996) (a religiously-affiliated school could dismiss an unmarried, pregnant teacher because premarital sex was against the church's teachings); marital status, see Little v. Wuerl, 929 F.2d 944, 951 (3rd Cir. 1991) (a religiously-affiliated school could fire a teacher who did not have her marriage annulled in accordance with the religion's practices); and sexual orientation, see Hall v. Baptist Memorial Health Care Corp., 215 F.3d 618, 625 (6th Cir. 2000) (a religiously-affiliated school could fire a school counselor after she attained a leadership position in a church that accepted gay and lesbian members). In addition, the Leadership Conference does not want to risk reopening the possibility that groups that discriminate based on race, like Bob Jones University could now prevail under charitable choice.

As bad as the problems are with the charitable choice provision in S. 304, they can get even worse. For example, some have suggested amending S. 304 to include the employment provision from H.R. 7, the "Community Solutions Act of 2001," which the Bush Administration endorsed as the legislative vehicle for its faith-based initiative. The employment provision in H.R. 7 is even more sweeping than the corresponding provision in S. 304. H.R. 7 provides that, for twelve federal program areas, "[i]n order to aid in the preservation of its religious character, a religious organization that provides assistance under a program described in subsection (c)(4) may, notwithstanding any other provision of law, require that its employees adhere to the religious practices of the organization." H.R. 7, 107th Cong. § 201 at pp. 22-23 (2001). Thus, the employment provision in H.R. 7 squarely seeks to override all other civil rights laws that protect against religious discrimination.

Supporters of H.R. 7 have pointed to a provision, not included in S. 304, that purportedly saves a short list of civil rights statutes from the effect of its otherwise sweeping employment provision. Thus, laws such as Title VI of the Civil Rights Act of 1964, the Rehabilitation Act, and Title IX of the Education Amendment of 1972 would continue to apply to all providers under H.R. 7.

However, that savings provision would not provide meaningful protection against employment discrimination. None of the cited laws provide any protection against employment discrimination based on religion, sex, pregnancy status, marital status, or sexual orientation. In addition, the Rehabilitation Act incorporates by reference the employment provisions of the Americans with Disabilities Act, which allows religious employers to prefer members of their own religion.

Moreover, Title VI of the Civil Rights Act of 1964 provides only incomplete protection against employment discrimination based on race in federal programs and activities. Title VI's prohibition against discrimination based on race, color, and national origin in federal programs and activities includes employment discrimination only "where a primary objective of the Federal financial assistance is to provide employment." 42 U.S.C. § 2000d-3. As a result, a federally-funded religious organization could apply the H.R. 7 employment provision in firing a person who refused to adhere to the religious organization's racially discriminatory practices. Unless a primary objective of the federal program was to create employment, the fired employee would have no recourse under Title VI, Title VII, or any other federal civil rights law. Thus, not only could race discrimination occur with no federal remedy, but the person engaging in race discrimination could receive federal dollars.

CHARITABLE CHOICE GOES FAR BEYOND CURRENT LAW

The Leadership Conference would also like to take this opportunity to address directly two arguments which have been offered to counter our position against charitable choice legislation. First, we do not seek to use this legislation to undo any of the exceptions to fair employment laws currently available to religious organizations. Second, the provision of federal funds to certain religiously-affiliated organizations, does not support allowing religious discrimination by providers of other federal services.

On the first point, the Leadership Conference and its members have no intention of eliminating any of the statutory exemptions for religious organizations to prefer members of their own religion in employment. Moreover, many of those exemptions are constitutionally compelled as a means of ensuring free exercise of religion. Although individual members of the Leadership Conference may disagree on the scope of a few of the exemptions, we know of no current or planned efforts by anyone to seek legislation to reduce or eliminate these exemptions.

On the second point, although many religiously-affiliated organizations receive federal funds, most of these organizations follow the same rules as every other federally-funded service provider, including an agreement not to discriminate based on religion. However, other organizations, such as certain universities and hospitals, receive federal funds in the form of student aid grants and Medicare payments that the courts view as aid to the beneficiary, rather than aid to the institution. Thus, some courts have held that many of those organizations do not have to comply with all of the requirements that apply to federal contractors and grantees. In addition, many religiously-affiliated universities, hospitals, and other service providers organize themselves in ways that partition religious activities from secular activities, and claim a religious organization exemption for some parts of the organization, but not others. These practices are not analogous to charitable choice.

There certainly may be individual contractors or grantees or specific programs or administrators which authorize religious discrimination in a federal program or activity. However, even if such discrimination occurs, it is not necessarily constitutional, legal, or wise. Simply finding an instance of a federal contractor or grantee discriminating based on religion is not itself a reason to legislate more opportunities for new harms.

FINDING A BETTER WAY

We believe that there are better ways to bring more groups into the important work of providing social services to communities in need. The Leadership Conference offers its cooperation and assistance in developing new legislation to assist smaller providers of social services--both religiously-affiliated and secular--in gaining easier access to federal programs. We appreciate how intimidating programmatic requirements, including civil rights safeguards, may appear to organizations that have never participated in federal programs. However, we believe that the successful participation of many religiously-affiliated organizations in federal programs--groups such as Catholic Charities, United Jewish Communities, and Lutheran Social Services--provides a good model for further legislation.

New legislation could include provisions for: (1) technical assistance in setting up a service provider, locating grant and contract opportunities, and applying for grants and contracts; (2) clear statements of responsibilities and liabilities of federal contractors and grantees; (3) specific models for how federal contractors and grantees can comply with civil rights laws and other safeguards; and (4) waiver of any incorporation or application fees for small nonprofits.

Of course, these suggestions are not exhaustive. However, we hope to work with members of the Committee in developing these and other ideas into new legislation that would meet many of the objectives of charitable choice, even as federal contractors and grantees would continue to comply with civil rights and other safeguards. Thank you again for the opportunity to testify before you.

[The attachments are being retained in the Committee files.]