In his speech today on faith-based programs, Sen. Barack Obama (D-Ill.) proposed that religious groups cannot compete for government contracts unless they give up their freedom to consider religion in their hiring decisions, a radical proposal that effectively repeals Charitable Choice:

In order to receive federal funds to provide social services, faith-based organizations … must comply with federal anti-discrimination laws, including Title VII of the Civil Rights Act of 1964. Religious organizations that receive federal dollars cannot discriminate with respect to hiring for government-funded social service programs.

This is a complete reversal of the Charitable Choice language that President Bill Clinton signed in 1996. Obama’s plan says that when a faith-based organization takes federal dollars, it could be forced to hire an atheist or else lose its federal funding. Since people make policy, by losing the ability to control its people, the group would lose its ability to preserve its faith-based character. In other words, it would strike at the heart of the faith-based initiative.

At the heart of the law Clinton signed in 1996 greatly expanding the ability of faith-based organizations to receive federal contracts was a provision making sure that faith-based organizations would retain their ability to take into account a person’s religion in employment decisions.

While the 1964 Civil Rights Act prohibited discrimination based on race, sex or religion, it also allowed religious organizations to take religion into account in hiring and firing. But once a faith-based organization took federal dollars, it lost this exemption. As a result, faith-based groups that contracted with the government to provide a general service — run a drug-rehab program or a homeless shelter, for example — had to give up their special religious character, becoming just another religiously neutral service provider.

There were two problems with this arrangement. The first was that it prohibited religious groups from competing for federal contracts, contributing to what Richard John Neuhaus has described as “the naked public square,” a public life denuded of religion. The second problem was that several of the faith-based organizations were much more effective than other groups at getting drug addicts and convicts and at-risk teenagers to change their behavior. Research suggested that it was the pervasive religiosity of the faith-based organizations that led to their successes. And so sociologists, most prominently John J. DiIulio of the University of Pennsylvania, began recommending that government contracts for social services be opened up to faith-based organizations.

Thus was born the idea of Charitable Choice, which then-Sen. John Ashcroft (R-Mo.) proposed and Clinton signed as Section 104 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. That law allowed religious organizations to apply for federal welfare contracts while retaining their ability to consider religion in hiring. Similar language was included in a wide variety of laws, including those helping the homeless and the mentally ill.