Washington, D.C.—Today, the religious equality watchdog organization American Atheists denounced the Small Business Administration (SBA)’s recently released regulations and guidance on the Coronavirus Aid, Relief, and Economic Security (CARES) Act as an unconstitutional giveaway to houses of worship that is ripe for abuse.
These news rules give houses of worship access to $350 billion in federal money from the Paycheck Protection Program (PPP) to fund religious activities, including paying clergy salaries, rent, and utilities. Longstanding SBA regulations have prevented “businesses principally engaged in teaching, instructing, counselling or indoctrinating religion or religious beliefs, whether in a religious or secular setting” from receiving business or economic disaster loans. However, with its news guidance, SBA indicates that it “will decline to enforce these subsections.”
“Direct government subsidy of religious activity is the clearest example of a violation of the Establishment Clause imaginable,” said Alison Gill, Vice President for Legal and Policy at American Atheists. “SBA cannot simply change its rules to sidestep the clear limits of the Constitution.”
“This program was created by Congress to protect small businesses. Instead, SBA is giving churches easier access to funding than businesses or other nonprofits,” Gill added.
According to SBA’s guidance, unlike other nonprofits, houses of worship need not apply for 501(c)(3) status to be eligible for PPP funding. In addition, affiliation rules, which can disqualify businesses and nonprofits from receiving PPP funding, do not apply to houses of worship, allowing individual churches affiliated with larger denominations to receive direct funding.
“These religious exemptions turn the CARES Act into a taxpayer giveaway to churches and shields them from government oversight,” said Gill. “Unlike all other nonprofits, houses of worship do not file tax returns, preventing any federal oversight of their use of this money.”
“We have to be even more vigilant during a crisis like this to prevent our government from ignoring its obligations under the Constitution,” said Nick Fish, president of American Atheists. “This bill contains provisions allowing the American people to support their houses of worship—if they choose to do so—with additional tax breaks on donations. And, just as the Founders intended, that’s to whom churches should turn when they need help. Not the federal government.”
“It’s unconscionable that with more than 10 million Americans out of work, the SBA is subsidizing wealthy religious groups and mega churches with untold billions of taxpayer money,” added Fish.
American Atheists, along with a coalition of seven other civil rights and religious equality advocates, previously advised the SBA of its obligations under the Constitution in the administration of this program.
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